Sentiment in manufacturing deteriorated slightly in March. A 2 point drop left INSEE's business climate indicator at 101, in line with expectations but still its lowest print since June 2015.
The headline deterioration, its first since last November, reflected broad-based weakness. Past output (minus 6 after minus 3) was especially soft but orders and demand (minus 15 after minus 14) also moved in the wrong direction. Executives' personal outlook (14 after 18) similarly worsened leaving just the general industry production outlook (minus 1 after minus 4) to register any improvement.
Elsewhere the picture was more mixed. On the positive side, sentiment in retail trade (104 after 101) retraced most of February's decline, wholesale (102 after 101) also made headway and construction (92) was at least flat. However, morale in services (99 after 100) dipped below its long-run average. As a result, economy-wide sentiment lost a point and at 100 equalled its lowest level since last July.
In the aggregate, INSEE's results are rather less bullish than those of the flash PMI survey released on Tuesday. However, both reports suggest that the French economy continues to expand at a frustratingly sluggish pace.
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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