France: Business confidence drops in July
July 22, 2011
In July, the business sentiment index published by the National Statistical Institute (INSEE) dropped to 105 points from a revised 110 points in June (previously reported: 109 points). The reading was below market expectations, which saw the index easing to 107 points. In spite of the monthly decrease, business sentiment remains above its long-term average of 100 points. The drop in business confidence reflected a notable deterioration in the general production outlook. In addition, personal production perspectives as well as demand and total order levels deteriorated over the previous month. The drop in business confidence does not bode well for economic activity at the outset of the third quarter. According to the monthly index of business activity (MIBA) elaborated by the Central Bank, GDP increased 0.2% in the second quarter, which was down 0.2 percentage points over last month's estimate and matched the INSEE forecast for Q2 GDP growth according to its INSEE's June quarterly economic outlook.