France: Business confidence picks up in June
June 22, 2011
In June, the business sentiment index published by the National Statistical Institute (INSEE) rose to 109 points from a revised 106 points in May (previously reported: 107 points). The reading overshot market expectations, which had seen the index at 106 points. With the monthly increase, the index moved further above its long-term average of 100 points. The improvement in business confidence reflected a rebound in the general production outlook, bouncing back from last month's sharp drop. In addition, personal production perspectives as well as demand and total order levels improved over the previous month. Despite the improvement in business confidence the economy is likely to have lost momentum in the second quarter. According to the monthly index of business activity (MIBA) elaborated by the Central Bank, GDP will increase 0.4% in the second quarter, which was revised downwards by 0.1 percentage points over last month's estimate. INSEE sees the economy growing an even slower 0.2% in the second quarter, according to its June quarterly economic outlook released. In the first quarter, the economy had grown a seasonally adjusted 0.9% over the previous quarter, which represented the fastest expansion in almost five years.