France: Business sentiment soars to highest reading in over five years

According to the National Institute of Statistics and Economic Studies’ (INSEE) business climate survey on manufacturing activity, the French business confidence indicator jumped from 102 points in November to 106 points in December. The reading beat market expectations of 102 points and marked the highest print in almost five and a half years. 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’ broad-based optimistic outlook on the economy. Looking at the details, general production and individual production expectations both rose. Past activity and global order books rose to the highest level since July 2011.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.0% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, participants expect fixed investment to expand 2.1%.