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FR: Business Climate Indicator
| Actual | Previous | Revised | |
| Index | 94 | 99 | 100 |
Highlights
Business sentiment fell to its lowest level in seven months, with the Climate Index falling to 94 in April from a revised 100 (101) in March, with the general business outlook souring to minus 39 from minus 28.
Order books which have been under pressure for some time, are seeing no signs of recovery with ordering intentions falling to minus 13 from minus 8. At the same time, sales have deteriorated with the reading for recent sales falling to minus 22 from minus 19, matching the low of April of last year. Expected sales to fell to minus 14 from minus 11, the lowest since September.
Inflation is also hitting sentiment, with the result for expected selling prices hitting 11, the highest since a reading of 13 in October 2023.
Businesses are feeling the effects of the conflict in the Middle East which has now been going on for nearly two months. The current status of the conflict according to recent reports appears to show there will be no immediate or easy cease fire. French business were optimistic just a few months ago that order books and, by extension, production would pick up. That is no longer the case.
Consumers are also facing higher prices which will crimp demand and have a negative effect on GDP.
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.