Manufacturing sentiment surprisingly deteriorated sharply in October. The headline fell fully seven points to 92, its to sharpest decline since the pandemic and well below its long-term average of 100. Past production, production expectations.

Even though inventory levels have reached their highest point since 2023, workforce concerns remain. Future expectations have reached their lowest level since 2021, although past personnel changes have remained consistent. Supply-side obstacles have increased, affecting a quarter of companies, despite modest improvements in procurement.

Overall, the manufacturing sector continues to be burdened by economic uncertainty, weakening demand, and declining production. This latest update puts the RPI at 1, showing overall economic activity performing much as expected. However, at 25, the RPI-P shows the real economy still outperforming.

Sentiment in manufacturing is seen improving from 99 in September to 100 in October, matching its long-run average.

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.