Last month, the INSEE business climate indicator dropped to 100 from previous month’s 101. April’s number is likely to have risen back to 101, according to Societe Generale. The confidence indicator for manufacturing is likely remain at 101; however, it will provide a better picture of the manufacturing sector as compared with the Bank of France survey or PMIs, noted Societe Generale.
As concerns regarding global economic growth and market volatility in Q1 appear to have diminished, French confidence indicators should begin to stabilize, added Societe Generale. Historically, the INSEE business climate indicator’s reading of 101 is in line with an economic growth rate of 0.3% on quarterly basis. The French business sentiment is expected to be positively affected by the mixture of a weaker euro, lower oil prices and additional tax cuts unless the global economy is impacted by a major financial shock.
