France Business Confidence May 2020


France: Business sentiment ticks up in May but remains largely pessimistic

May 27, 2020

In May, the French Statistical Institute’s (INSEE) business climate indicator for the manufacturing sector inched up to 70 from a revised 68 in April (previously reported: 82). As a result, the index remained below the 100-threshold, its long-term average.

Manufacturers’ general and personal production expectations recovered from April’s slump, although remained pessimistic. Similarly, employment intentions rebounded slightly but remained entrenched in negative territory. Meanwhile, firms reported rising inventories of finished products.

Regarding the prospects for France, Julien Manceaux, senior economist at ING, noted:

“Overall, May figures show that activity was still very low at the beginning of the month, which confirms our fears of a GDP contraction of around 15% in the second quarter. However, the indicators released this morning show signs of a recovery that could turn out to be more dynamic than expected. It will take more to revive hopes of a "V-shaped" recovery, but it is nonetheless a positive signal for growth in the coming months. For now, we maintain our forecast of a 9% contraction in GDP in 2020 before a 6.5% rebound in 2021.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 1.9% in 2020, which is down 4.1 percentage points from last month’s forecast. For 2021, the panel sees fixed investment growth at 3.0%.

Author:, Economist

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France Business Confidence Chart

France Business Confidence May 20 20 1

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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