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Increase in the manufacturing PMI Index
In January 2025, the French economy showed signs of improvement, with the S&P Global Manufacturing PMI Index rising to 45.3 points, a significant increase from 41.9 points in December. This increase, although positive, indicates that the manufacturing sector is still below the 50-point growth threshold, suggesting a phase of stagnation rather than expansion. However, the fact that this is the highest level in the last seven months offers hope for recovery for the sector.
Contraction in the service sector
Contrary to the manufacturing sector, the service sector PMI Index declined, falling to 48.9 points from 49.3 points in December. This decline highlights a contraction in the services sector, which contributes to a general trend of slowing economic activity in France. The decline in service activity is worrying, as this sector represents a significant part of the French economy and its weakening could have wider repercussions
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Analysis of the composite PMI Index
Overall, the composite PMI Index, which combines data from the manufacturing and service sectors, rose to 48.3 points, compared to 47.5 points in the previous month. This represents the highest level in the last four months, but it is important to note that the reading remains below the growth threshold. According to the S&P press release, the first month of 2025 saw a further reduction in business activity in the private sector, extending the contraction sequence to five months. This scenario suggests that, despite some signs of improvement, the French economy is facing significant challenges
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Impact on the stock market
The economic environment has also had repercussions on financial markets. On, the Tokyo Stock Exchange closed lower, with the Nikkei index recording a decrease of 0.1 percent. The losses were particularly evident in the electronic and automotive sectors, with Mitsubishi Motors seeing a 6.9% drop due to rumors regarding an exclusion from an aggregation with Nissan-Honda. This scenario highlights how economic uncertainties can negatively affect investor confidence and market performance
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