Private sector business activity was just marginally firmer than originally thought at the start of the year. The 49.0 flash composite output index was revised up a tick to 49.1, matching the final December reading and still indicating an overall modest contraction.

The positive headline adjustment came courtesy of services where the 49.2 flash sector PMI was boosted to 49.4, now down just 0.1 point versus its final year-end print. As shown in the preliminary data, the overall performance was held in check by another decline in new orders and backlogs were trimmed again to support output. Still, employment growth remained positive and even accelerated to a 3-month high. Looking ahead service providers were optimistic about the coming year and sentiment was the most positive in six months.

Inflation developments were mixed. Hence, the rate of increase in input costs was again historically elevated but eased marginally. By contrast, output price inflation accelerated as firms sought to widen profit margins.

In sum, today's update suggests that the French economy was close to stagnation at the start of the year. Economic growth this quarter could be positive but is unlikely to be anything to write home about. To this end, the final January report puts the French ECDI at minus 7 and the ECDI-P at exactly zero. In other words, economic activity in general is performing much as the forecasters anticipated.

No revisions are expected to the flash data.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 750 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.