Sentiment in French manufacturing was little changed in March. From a stronger revised 105 in February, the headline index dipped to 104, a point above the market consensus and still some 4 points above its long-run average.

March's minimal decline largely reflected weaker past output (10 percent after 16 percent) which hit a 3-month low. However, both overall order books (minus 12 percent after minus 14 percent) and overseas orders (minus 8 after 10) improved. Meantime, personal production expectations (11 percent after 14 percent) deteriorated but general production expectations (minus 1 percent after 0 percent) were broadly stable. Expected headcount (15 percent after 12 percent) rose while expected selling prices (29 percent) were flat at a 17-month low, albeit still well above their historic norm (4 percent).

Across the other main sectors, sentiment worsened marginally in services (105 after 106) and construction (111 after 112) and deteriorated more obviously in retail trade (99 after 102). However, wholesale trade (98 after 96) crept up to a 3-month high. As a result, the economy-wide index shed just a point to 103.

Today's update is rather more cautious about the state of the French economy than the flash PMI survey. That said, both reports point towards another quarter of positive GDP growth. The latest data boost the French ECDI to 14 and the ECDI-P to 10, both readings indicating only a limited degree of overall economic outperformance.

Forecasters see the business climate indicator, which has been flat, dipping 1 point to 103 in March.

INSEE is France's National Institute of Statistics and Economic Studies. 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.