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Economy in Brief

Bank of France Business Index is Flat in June
by Robert Brusca July 13, 2007

The BOF Outlook index hit a local peak from Mar 07; It is flat in June.

The Bank of France Business report is a comprehensive survey on businesses and their expectations. The table below is a summary of the more extensive report with industry detail. In that report the sentiment index at 108.2 is above its average since January 1987 that stands at 105. However, the index was flat on the month and it had reached its peak in this cycle at 111.89 in March. The index fell sharply from that peak and has stayed in a very tight range over the next three months.

French elections have taken place and the past few months are in the post election period; French consumer confidence has been on an extended rise in the wake of the elections.

As for business, the production outlook at 8.7 is below its average value of 12, although production in the current month at 10.8 is above its average value of 9.

Overall order books are stuffed compared with historic averages. The average for order books is +3 while the June reading is 26.8, the strongest category relative to its average by far. Foreign orders are also above normal at 12.1 compared to an average of 9. New orders are, however, not as robust at a level of 10.9 in June compared to an historic average of 10.

At 85.9, capacity use is above the historic norm of 84. Hiring in the current month at -1.8 is weaker than the monthly average of -1 while the outlook at -3.9 is better than the historic average of -6.

On balance, the BOF index is better than average. And while many of its component readings are above normal, most are not far above normal and there is some evidence of a loss in momentum.

Bank of France Monthly INDUSTRY Survey:SUMMARY
        12 MO Since Jan-87 2Yr Percentile
  Jun-07 May-07 Apr-07 AVERAGE Average rank/range
Production-latest month
Total Industry 10.77 9.52 6.59 8 9 61.3%
Production Outlook
Total Industry 8.7 17.66 7.34 9 12 51.1%
Overall order books 26.85 29.77 30.57 25 3 84.5%
Foreign Orders 12.12 13.35 11.56 13 9 61.2%
New Orders
Total Industry 10.89 13.11 8.68 11 10 49.4%
Stocks: Finished Goods
Total Industry -1.4 -2.68 -5.36 -2 -2 57.3%
Capacity Utilization 85.96 85.72 86.05 85 84 89.0%
Latest Month -1.84 2.25 0.36 0 -1 28.4%
Outlook -3.92 -4.52 -5.28 -4 -6 82.9%
Industry Sentiment Index 108.21 108.26 108.36 107 105 75.4%
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