| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 100 | 99 | 100 |
Highlights
Sentiment in manufacturing unexpectedly deteriorated again in May. At 99, the headline index was a point below both the market consensus and its unrevised April level. It also dipped below its 100 long-run average for the first time since January.
Past production (minus 2 percent after 1 percent) declined marginally and despite a small improvement in order books (minus 17 percent after minus 19 percent), both general production expectations (minus 9 percent after minus 7 percent) and personal production expectations (1 percent after 8 percent) worsened. Expected selling prices (minus 1 percent after 3 percent) also decreased.
Elsewhere, sentiment was more mixed with an improvement in services (101 after 100) contrasting with no change in construction (also 101) and falls in both retail trade (99 after 102) and wholesale trade (94 after 95). As a result, the economy-wide gauge held steady at 99, a point short of its historic norm.
Today's surprisingly soft results are in keeping with the disappointing flash PMI data released yesterday. The economy is probably keeping its head above water but still lacks any real momentum. To this end, the May update reduces the French RPI to minus 13 and the RPI-P to minus 15. Having outperformed for much of the year, economic activity in general is now struggling to keep up with market forecasts.
Past production (minus 2 percent after 1 percent) declined marginally and despite a small improvement in order books (minus 17 percent after minus 19 percent), both general production expectations (minus 9 percent after minus 7 percent) and personal production expectations (1 percent after 8 percent) worsened. Expected selling prices (minus 1 percent after 3 percent) also decreased.
Elsewhere, sentiment was more mixed with an improvement in services (101 after 100) contrasting with no change in construction (also 101) and falls in both retail trade (99 after 102) and wholesale trade (94 after 95). As a result, the economy-wide gauge held steady at 99, a point short of its historic norm.
Today's surprisingly soft results are in keeping with the disappointing flash PMI data released yesterday. The economy is probably keeping its head above water but still lacks any real momentum. To this end, the May update reduces the French RPI to minus 13 and the RPI-P to minus 15. Having outperformed for much of the year, economic activity in general is now struggling to keep up with market forecasts.
Market Consensus Before Announcement
Sentiment in French manufacturing unexpectedly deteriorated in April to 100 from 103 in March. May's consensus is steady at 100.
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.
