| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Index | 97 | 95 to 97 | 96 | 96 |
Highlights
Business sentiment was stable in July at 96, the same reading as in June, while the manufacturing component fell to 96 from 97 in June and services remaining stable at 96. Economists had expected a slight improvement in overall sentiment to 97.
In looking more closely at the manufacturing sector, overall order books were seen less pessimistically in July, moving to minus 20 from minus 22 in June. Foreign order books deteriorated to minus 18 from minus 16 while the reading for finished goods inventories increased to 16 from 15.
Among obstacles limiting production in July, 13 percent of companies reported sourcing difficulties, an increase from ten percent the previous month. At the same time, 26 percent indicated demand challenges, up from 25 percent in June.
Taken together today's results show the French private sector performing below its long-term average as tariff uncertainty continues to weigh. As of today, there has been little to suggest progress on reaching a trade deal with the United States before the August 1 deadline. Until there is more clarity on that, there is unlikely to be any improvement in sentiment.
In looking more closely at the manufacturing sector, overall order books were seen less pessimistically in July, moving to minus 20 from minus 22 in June. Foreign order books deteriorated to minus 18 from minus 16 while the reading for finished goods inventories increased to 16 from 15.
Among obstacles limiting production in July, 13 percent of companies reported sourcing difficulties, an increase from ten percent the previous month. At the same time, 26 percent indicated demand challenges, up from 25 percent in June.
Taken together today's results show the French private sector performing below its long-term average as tariff uncertainty continues to weigh. As of today, there has been little to suggest progress on reaching a trade deal with the United States before the August 1 deadline. Until there is more clarity on that, there is unlikely to be any improvement in sentiment.
Market Consensus Before Announcement
Forecasters expect the index to improve slightly to 97 in July from 96 in June.
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.
