| Actual | Previous | |
|---|---|---|
| Index | 96 | 96 |
Highlights
The retail sector is weighing on overall business sentiment in France, leaving the index at 96 since June despite improvement in the construction sector.
Retail sentiment fell to 92 during August, down from 99 in June and July, as businesses dialed back ordering plans amid the generally negative outlook for the sector. As a result, the index remains below its long-term average of 100 for the 14th consecutive month.
Services also declined, though not to the degree as the retail sector, dropping 1 point to 95 in August, with managers more pessimistic about their own businesses than in recent months. The manufacturing sector stabilized in August at 96 with most components stable, save for finished-goods inventories which declined.
Today's results are more cautious that yesterday's flash PMI report showing manufacturing climbing to 49.9 in August from 48.2 in July, while services increased to 49.7 from 48.5. To be sure, these are flash readings and could change with the release of final figures.
Since 15 percent tariffs were announced for the EU at the beginning of August, businesses should now be able to factor them into their planning. So far, August data has been somewhat volatile as seen with todays reports and the PMIs. More clarity will emerge on the effects in the coming weeks and months, particularly with more detailed GDP reports which will show the effects of trade on Europe's economies.
Retail sentiment fell to 92 during August, down from 99 in June and July, as businesses dialed back ordering plans amid the generally negative outlook for the sector. As a result, the index remains below its long-term average of 100 for the 14th consecutive month.
Services also declined, though not to the degree as the retail sector, dropping 1 point to 95 in August, with managers more pessimistic about their own businesses than in recent months. The manufacturing sector stabilized in August at 96 with most components stable, save for finished-goods inventories which declined.
Today's results are more cautious that yesterday's flash PMI report showing manufacturing climbing to 49.9 in August from 48.2 in July, while services increased to 49.7 from 48.5. To be sure, these are flash readings and could change with the release of final figures.
Since 15 percent tariffs were announced for the EU at the beginning of August, businesses should now be able to factor them into their planning. So far, August data has been somewhat volatile as seen with todays reports and the PMIs. More clarity will emerge on the effects in the coming weeks and months, particularly with more detailed GDP reports which will show the effects of trade on Europe's economies.
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.
