France: Business confidence drops further in January
January 23, 2012
In January, the business sentiment index published by the National Statistical Institute (INSEE) dropped to 91 points from the 94 points recorded in December, as the European debt crisis concerns and slowing global demand continue to discourage investment. The reading undershot market expectations, which had business confidence inching up to 95 points, and marks the lowest level seen since February 2010. With the monthly decrease, business sentiment moved further below its long-term average of 100 points, where it has now languished for five consecutive months. The fall in business confidence reflected a further deterioration in both general and personal production expectations, as well as in demand and total order levels. The decline in business confidence does not bode well for economic activity in the months ahead. According to the Central Bank's monthly index of business activity (MIBA), GDP remained stable in the fourth quarter, which contrasts the 0.2% contraction expected by the INSEE in its December quarterly economic outlook.