France: Business confidence improves in September
October 21, 2010
The Central Bank's business sentiment indicator for manufacturers rose from 101 points in August to 102 points in September after four consecutive months without a change in business confidence. At the current level, the index is just slightly above its long-term average of 100. While inventories of final goods declined slightly, order books increased markedly and returned to a level comparable to that observed before summer 2008. In addition, capacity utilisation rose significantly and activity in the service sector rose sharply, buttressed by strong growth in temporary work and transport. More recent data for the economic climate in the manufacturing industry corroborates the improving outlook implied by the Central Bank's indicator. The business sentiment measurement elaborated by the National Statistical Institute (INSEE) rose to 102 points in October from September's 99 points, which continues the upward trend in place since March 2009 that was only briefly interrupted in June this year. The rise contrasted market expectations, which anticipated sentiment to fall to 98 points. The Central Bank's monthly index of business activity (MIBA) expects the economy to expand 0.3% in the third quarter, which is 0.1 percentage points below the forecast elaborated by INSEE in its quarterly economic outlook from October.