Sentiment in French manufacturing was stable in January but only at December's downwardly revised level. At 99, the headline index was a point softer than the market consensus and similarly a point short of its long-run average. That said, the trend in recent months has been flat.

Production (minus 9 percent after minus 1 percent) fell again and at a steeper rate than at year-end while orders books (unchanged at minus 19 percent) declined even more rapidly. Expected employment growth (unchanged at 6 percent) was still positive and personal production expectations (7 percent after 4 percent) improved but general production expectations (minus 7 percent after minus 10 percent) remained negative. Meantime, expected selling prices (4 percent after minus 3 percent) moved back above zero for the first time since last September.

Elsewhere, sentiment improved in services (101 after 100), construction (103 after 101), and retail trade (104 after 100) but worsened in wholesale trade (90 after 91). As a result, the economy-wide measure was unchanged at 98.

Today's update is rather less gloomy than yesterday's flash PMI survey but still points to a sluggish start to the year by the French economy. However, at 4 and 5 respectively, the French RPI and RPI-P show overall economic activity at least running broadly in line with market expectations.

Forecasters see the business climate indicator holding steady at 100 after December's 1-point increase.

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.