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FR: Business Climate Indicator
| Consensus | Consensus Range | Actual | Previous | |
| Index | 100.5 | 98.5 to 102.0 | 105.0 | 102 |
Highlights
The manufacturing outlook rose to its highest level since July 2022, as the Business Climate Index increased to 105 in January from an unrevised 102 in December. Most of the sub-components showed improvement.
Economists were expecting the measure to decline to 100.5 from December's reading, according to the median of an Econoday survey of economists' forecasts. These ranged from 98.5 to 102.0.
Overall, order books improved with those from abroad at minus 6 in January compared to minus 7 the month before. At the same time, the reading for finished goods inventories stood at 8 compared with 19 in December.
Businesses also reported and improved production outlook, with the measure for prospects rising to 17 in January from 10 the previous month. Supply constraints eased in January, improving to 10 from 14 the previous month, with companies also reporting increased workforce shortages.
The transportation sector has been underpinning production for a number of months, and that was true again in January. In January, the index rose to 112 from 109 as other transportation equipment rose to 118 from 116.
Today's results show manufacturing is starting off the year on a very positive note. It appears businesses have digested the 15 percent US-imposed tariffs for now.
Market Consensus Before Announcement
Indicator expected to erode to 100.5 in January from 102.0 in December.
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.