France Business Confidence August 2016


France: Business sentiment drops to over-one-year low in August

August 25, 2016

According to the National Institute of Statistics and Economic Studies (INSEE) business climate survey, the business confidence indicator dropped from 103 points in July to 101 points in August. The reading, which marks the lowest print since June 2015, undershot market expectations of 103 points. Despite the drop, the indicator remains above the 100-point long-term average, which is the benchmark measure the INSEE uses to distinguish between improving and worsening business expectations.

According to the INSEE, the result reflected businesses’ nearly broad-based pessimistic outlook of the economy. Looking at the details, personal production expectations dropped to the lowest point in two years and businesses grew more pessimistic on global order books, which dropped to the lowest level since November 2015. Businesses in the manufacturing and retail sector became more pessimistic while sentiment in the services and building construction industries was largely unchanged.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.3% in 2016, which is down 0.2 percentage points from last month’s forecast. For 2017, participants expect fixed investment to expand 1.7%.

Author: Jean-Philippe Pourcelot, Economist

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France Business Confidence Chart

France Business Confidence August 2016 0

Note: Value of monthly business sentiment indicator index; long-term avg. at 100.
Source: National Institute of Statistics and Economic Studies (INSEE).

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