French Private Sector Slips Back Into Contraction

2026-02-04 09:20:32

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The HCOB France Composite PMI for January 2026 was revised higher to 49.1 from a flash estimate of 48.6, but remained below December’s 50.0. The latest reading pointed to renewed weakness in private sector activity, with the downturn driven mainly by the services sector, where the Business Activity Index slipped from 50.1 in December to 48.4 in January, marking the first contraction since October. Manufacturing showed only tentative signs of stabilization, with capacity pressures rising but overall demand still subdued. New orders across the private sector fell at the fastest pace in six months, while employment recorded only marginal growth. Exports continued to weigh on activity, as overseas demand for services remained in contraction. Meanwhile, input cost inflation edged up to a five-month high, prompting firms to raise output charges modestly. Finally, business confidence improved, with year-ahead growth expectations rising to their strongest level since September 2024.

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