| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 99 | 98 | 99 |
Highlights
Sentiment in French manufacturing unexpectedly deteriorated in October. At 98, the headline index slipped a point versus its unrevised September mark, dipping below the market consensus and moving slightly further beneath its 100 long-run average. This is the third straight month that the headline measure has been short of its historic norm.
October's setback reflected a hefty fall in past output (minus 11 percent after minus 6 percent) but masked an improvement in overall order books (minus 17 percent after minus 22 percent). However, personal production expectations (5 percent after 17 percent) declined sharply and general production expectations (minus 10 percent after minus 6 percent) were also marked down. Expected selling prices (0 percent after 4 percent) hit a 5-month low.
Elsewhere, sentiment similarly worsened in services (100 after 101), construction (103 after 105) and, more noticeably, in retail trade (98 after 103). As a result, the economy-wide index shed a couple of points to 98, its second-weakest reading since February 2021.
Today's update points to another soft flash PMI survey next week. It also warns of a potentially steep fall in manufacturing output.
October's setback reflected a hefty fall in past output (minus 11 percent after minus 6 percent) but masked an improvement in overall order books (minus 17 percent after minus 22 percent). However, personal production expectations (5 percent after 17 percent) declined sharply and general production expectations (minus 10 percent after minus 6 percent) were also marked down. Expected selling prices (0 percent after 4 percent) hit a 5-month low.
Elsewhere, sentiment similarly worsened in services (100 after 101), construction (103 after 105) and, more noticeably, in retail trade (98 after 103). As a result, the economy-wide index shed a couple of points to 98, its second-weakest reading since February 2021.
Today's update points to another soft flash PMI survey next week. It also warns of a potentially steep fall in manufacturing output.
Market Consensus Before Announcement
Sentiment in manufacturing is expected to be unchanged at 99.
Definition
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.
Description
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.
