France Business Confidence

France

France: Business confidence continues to improve

January 21, 2011

The Central Bank's business sentiment indicator for manufacturers rose from 107 points in November to 108 points in December, improving for the fourth consecutive month. With the December increase, the index moved further above its long-term average of 100. Capacity utilisation rose slightly over the previous month and order books expanded, while inventories of final goods were in line with expected levels. In addition, activity in the services sector continued to grow, buttressed by improving staff levels. More recent data on the economic climate in the manufacturing industry are in line with the outlook implied by the positive reading of the Central Bank's indicator. The business sentiment measurement developed by the National Statistical Institute (INSEE) jumped from 102 points in December to 108 points in January, the highest level since March 2008, overshooting market expectations of 104 points. According to the Central Bank's monthly index of business activity (MIBA), the economy is expected to expand 0.6% in the fourth quarter while the quarterly economic outlook released by INSEE in December has the economy expanding 0.5% in the fourth quarter.


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