Private sector business activity was revised slightly firmer in February. At 51.7, the final composite output index was just 0.1 point above its flash estimate, 1.7 points higher than the 50-expansion threshold and up from January's final 49.1.

The positive headline revision was partly due to services where the 52.8 flash sector PMI was boosted to 53.1, up from January's final 49.4 and in positive growth territory for the first time since last October. This signalled the fastest growth since July 2022. New orders increased, but only marginally due to another decline in overseas demand which contracted by the most since December 2020. Nonetheless, job creation was the fastest in five months and backlogs rose at the strongest rate in four months. Looking ahead, businesses were optimistic about the coming twelve months although worries about inflation saw confidence ease slightly versus January.

Input cost pressures were strong, and charges rose at an accelerated pace leading to the second-largest increase on record in output prices.

Today's update bodes cautiously well for first quarter GDP growth which looks on course to beat the meagre 0.1 percent rate achieved at the end of 2022. That said, manufacturing remains in the doldrums and rising cost pressures continue to be a major issue. Both the French ECDI and ECDI-P now stand at exactly zero, indicating that economic activity in general is performing in line with market expectations.

No revisions are expected to the flash report.

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.