| Actual | Previous | |
|---|---|---|
| Index | 99 | 96 |
Highlights
The manufacturing sector saw signs of life in April, rising to 99 from 96 the previous month, with the majority of sectors positive save for overall production and finished goods inventories. Still, the overall business climate fell one point to 96, remaining below the long-term average of 100.
Last month, the retail outlook reached 100, but fell to 95 in April as businesses were more cautious on their order books and an overall decline in the business outlook. This could reflect hesitation as businesses try to gauge the effect of tariffs on their companies.
Construction was an additional drag on the overall index, down one point to 97 in April, with all components contracting, showing increased pessimism among managers. At the same time, services showed a slight improvement to 98 in April from 97.
The employment outlook increased one point to 97, remaining below the historical average of 100 for eleven months.
The key takeaway is the decline in the retail sector showing businesses seeing a cautious consumer. Recent earnings calls in the US illustrate that companies reliant on consumer spending are reporting decreased demand and revising their forecasts. The French consumer sector is expressing caution as well, and points to slower, if not contracting, retail sales in the coming months.
Last month, the retail outlook reached 100, but fell to 95 in April as businesses were more cautious on their order books and an overall decline in the business outlook. This could reflect hesitation as businesses try to gauge the effect of tariffs on their companies.
Construction was an additional drag on the overall index, down one point to 97 in April, with all components contracting, showing increased pessimism among managers. At the same time, services showed a slight improvement to 98 in April from 97.
The employment outlook increased one point to 97, remaining below the historical average of 100 for eleven months.
The key takeaway is the decline in the retail sector showing businesses seeing a cautious consumer. Recent earnings calls in the US illustrate that companies reliant on consumer spending are reporting decreased demand and revising their forecasts. The French consumer sector is expressing caution as well, and points to slower, if not contracting, retail sales in the coming months.
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.
