There was no significant change in manufacturing sentiment this month according to INSEE's new survey. At 99 the business climate indicator was just a point below its upwardly revised February level and so still within the tight 98-100 range seen since last October.
The survey's details were very mixed. Hence, a sharp deterioration in past output (sub-index minus 8 after zero) and worsening in executives' production expectations (7 after 11) contrasted sharply with stronger orders (minus 22 after minus 25) and a much more optimistic general industry production outlook (zero after minus 8).
However, elsewhere it was generally good news and confidence rose in retail trade (104 from 101), wholesale trade (98 from 95) and services (93 from 92). Construction was unchanged (89).
INSEE's March findings are rather more upbeat than those of yesterday's flash PMI survey which found slower growth in services and another outright contraction in manufacturing this month. The economy would appear to be expanding but getting a handle on first quarter growth will require additional hard data.
The indicator is a measure of the prevailing sentiment among French business leaders. The main focus is the manufacturing sector but the survey provides separate sentiment measures for construction, retail trade and services on a monthly basis and for wholesale trade every other month.
If you are looking for clues on French business sentiment, this survey would be a good starting point. The indicator is based on a survey that asks business leaders about their expectations for new orders and their overall impressions of the economy. The results are a diffusion index that reflects the difference between positive and negative responses as a percentage of the total number of answers. It uses 100 as the dividing line between positive and negative sentiment.
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