Sentiment in French manufacturing was unchanged this month. At 100, the headline index matched June's downwardly revised mark and means that confidence has been essentially flat at its long-run average since March. The July reading was also in line with the market consensus.

The latest outturn masked stronger past output (9 percent after 3 percent) and an improvement in overall orders (minus 15 percent after minus 18 percent). However, it also papered over a sharp worsening in personal production expectations (minus 5 percent after 10 percent) which slumped to their weakest level since November. By contrast general production expectations (minus 9 percent) were flat at June's 7-month low. Even so, expected selling prices (7 percent after 1 percent) rose for a second straight month and moved back above their historic norm (4 percent).

Across the other main sectors, sentiment was also unchanged in services (102) and construction (106) but improved in retail trade (106 after 102) and deteriorated in wholesale trade (92 after 94). As a result, the economy-wide index similarly held steady at 100.

Today's update suggests that French manufacturing is holding up rather better than indicated in recent PMI surveys so may make for some upside risk to next week's flash results for July. In any event, it puts the French ECDI at 7 and the ECDI-P at 10, both measures signalling at best only a very limited degree of outperformance by economic activity in general.

Forecasters see the business climate indicator dipping a further 1 point to 100 in July.

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.