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Economy in Brief

French Biz Indicator Turns Up
by Robert Brusca  March 23, 2012

The Insee Business climate indicator rose to 96 in March from 92 in February. It's the first increase in the indicator since June of last year. The climate reading is still weak below the midpoint of its high-low range since 1990. Its strongest component standing is only in the 67th percentile. That reading is for the strength in the 'likely trend for production;' having strength there is a hopeful sign. The 'likely sales price' trend also is above its mid-point with a range standing of the 57th percentile. Orders and demand and foreign orders and demand are below their range mid points with percentile readings of less than 50. Recast as percentiles in their ordered queues they are weaker still, in their 30th to 40th percentiles.

The main good news in the survey is that it did rise this month and some of the components moved quite sharply higher. The 'recent trend' component surged higher to a raw reading of -15 in March from a reading of -27 in February; quite a strong move. The 'recent trend' moved from -2 in Mar. to +6 in Feb. Both overall and foreign orders and demand improved with foreign orders and demand up to -15 in March. from -33 in February.

Some of the components in the Insee survey have moved sharply higher this month. Still, the standing of the various components and the headline is still quite weak. The rest of the Zone is still having a lot of trouble and weakness; Ireland has just slid back into recession, for example. The recent PMIs for MFG and Services for the Zone have moved decidedly lower. Events like that make this survey which reveals a positive trend for France one that seems to stand alone. Is France really reviving? Or, will this note of optimism prove to be fleeting?

France is also in the midst of an election cycle and that could be having some impact on perceptions of the economy is doing.

INSEE Industry Survey
    Since Jan 1990 Since Jan 1990
%tile Rank Max Min Range Mean
Climate 96 92 92 94 46.4 176 126 70 56 100
Recent Trend -15 -27 -35 -36 49.6 161 43 -72 115 -8
Likely Trend 6 -2 -5 0 62.3 144 29 -32 61 6
Orders & Demand -23 -26 -28 -26 44.0 180 33 -67 100 -16
Fgn Orders & Demand -15 -33 -26 -20 49.6 157 45 -74 119 -12
Likely Sales Price Trend 5 1 2 6 57.4 120 28 -26 54 3
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