FR: Business Climate Indicator

Tue Oct 24 01:45:00 CDT 2017

Consensus Actual Previous Revised
Level 110 111 110 111

INSEE was positive amount French manufacturing in October. The headline sentiment index weighed in at 111, unchanged from both its upwardly revised September reading and August print. It also equalled its highest mark since December 2007.

Recent past output (16 after 12) made fresh headway and a modest advance in new orders (6 after 3) wholly relect5ed a more buoyant domestic market. Executives' personal outlook on future production slipped a little (17 after 20) but remained historically firm and the general industry production outlook (31 after 23) was particularly optimistic.

Elsewhere the picture was a little mixed. Hence, sentiment was marginally lower in services (107 after 108) but firmer in both construction (105 after 104) and retail (113 after 112). As a result, the overall business sentiment climate dipped just a point to a still very robust 109. In general then, today's results bode well for the upcoming flash PMI surveys due very shortly.

INSEE's business climate indicator aims to summarise the mood of French business leaders. The survey asks questions about output, orders and inventories and expectations for future business. These are synthesised into an overall index of sentiment, adjusted so that the long-run average is 100. The main focus is the manufacturing sector but the survey also provides separate confidence 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.