Tuesday, October 23, 2012

The INSEE survey shows more jitters within the French business community

The National Institute of Statistics and Economic Studies (Institut national de la statistique et des etudes economiques or INSEE) of France conducts a monthly survey of French business conditions. The October results show a continuing deterioration. In fact the indicator hasn't been this low since 2009. It is entirely possible that survey indicators ("soft" data) do not fully represent the reality on the ground, but it certainly speaks to the lack of confidence within the French business community.
INSEE: - According to the business leaders of the main economic sectors, the French business climate loses one point again in October to reach 85 points, still under its long term average (100). Business climate indicator in manufacturing industry decreases by 5 points in October and the indicator in services loses 1 point. The indicator in the building sector remains stable whereas that of retail trade gains 2 points.

Source: INSEE

Economists who monitor developments in France will be looking to the PMI release tomorrow to see of this weakness in business climate is also reflected there. The PMI number for September was quite bleak (see discussion). Economic conditions in France provide a good glimpse into the trajectory of growth in the Eurozone as a whole.

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