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FR: Business Climate Indicator
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Index | 97 | 97 to 98 | 98 | 97 | 101 |
Highlights
French were companies more pessimistic in November, dragged down by deteriorating order books, as the Business Climate Index fell to 98 from an upwardly revised 101 (97) in October.
After improving to minus 15 in October, the reading for overall order books fell to minus 20 in November and is back below its long-term average of minus 18. Businesses were also more negative on their foreign orders as seen by the component falling to minus 15 from minus 4 in October.
It's worth noting that much of the contraction was due to a fallback in other transportation equipment which can be volatile. This fell to 103 in November from 117 the previous month, pulling the overall transportation sector reading to 100 from 110.
Also lower was the reading for machinery and equipment which slipped to 104 in November from 106 the previous month, with electrical equipment the main drag. This fell to 99 from 107.
Companies reported marginally higher supply and demand constraints even though there was some easing of sourcing difficulties and workforce shortages, although this is too little to contribute to a turnaround.
The manufacturing sector continues to face challenges with weak order books underscoring the problem. Geopolitical uncertainty along with continued domestic challenges are not giving businesses an impetus to expand their production.
Market Consensus Before Announcement
The index is expected flat at 97 in November from 97 in October.
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.