French PMI hovers near the 50 level, and the private sector is stagnating due to weak demand.

Jonas Feldhusen, an economist at Hamburg Commercial Bank, said: "The private sector in France continues to struggle to generate real momentum. Since November last year, the PMI index has been hovering near the growth threshold of 50.0 points, indicating that no significant progress has been made. A typical example is the stagnant recruitment activities in February. The main obstacles still come from the demand side, with new orders decreasing again, and export orders worsening. Looking at the industry level, the developments at the beginning of the year varied, with manufacturing showing some growth while the services sector shrunk. This trend continued in February, with a clear contrast between the growth in factory production and the decrease in service sector output. In addition, there has been a slight weakening in business expectations for the next year, but considering that the index measuring business confidence remains higher than the average level in 2025, we still remain cautiously optimistic. On the political front, the agreement on the 2026 budget has brought some calm, but the shadow of Macron's successor as president has already been cast."