French business activity surpasses expectations

22 Feb 2019

finance districtFrench business activity stabilised in the month of February, Reuters reports.

A monthly survey released on Thursday showed French business activity recorded better results than forecast, despite anti-government protests affecting services.

Data Compiler HIS Markit’s preliminary purchasing managers index increased to 49.9 points in February from 48.2 recorded last month. This surpassed economists’ average prediction of 49.0 in a Reuters poll, recording a three-month high.

“Although the ‘gilets jaunes’ protests are still ongoing and panellists have suggested that these are still causing disruption, the economy showed resilience in the latest survey period,” IHS Markit economist Eliot Kerr said.

He added: “That said, the economy will continue to post below its potential as long as social unrest continues.”

The survey revealed that firms hired more while the flow of new business only showed a slight decrease.

The manufacturing sector index increased to a five-month high of 51.4 despite a forecast 51.0. New order flow grew in February, however foreign demand decreased due to a hike in firms’ prices.

Additionally, the services index rose to a three-month high of 49.8 from 47.8 in January, exceeding economists’ projected 48.7.