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Economy in Brief

French Climate Downward Revision Creates Appearance of Gain in August
by Robert Brusca  August 29, 2012

France’s Insee business climate reading for July was revised to 89 from 90 making the ‘repeat’ initial reading of 90 into a gain in August.

The index is still weak at the 36.8th percentile of its high/low range and yet it is lower than this reading only about 15% of the time. The reading is quite weak. The recent trend is even worse at the 23 percentile of its high/low range and is weaker than this only 9% of the time.

Foreign orders and demand are weak readings as well as they also cluster in the mid- to high- 30th percentile of their respective high/low range and are weaker than their current position about 20% of the time.

The only ‘upbeat’ reading is for likely prices. That indicator is only at the mid portion of its high/low range and of its ranked queue.

On balance the ‘improvement’ in Climate is a thin reed of hope. The chart shows the barest of rebounds in August. At the same time the data and circumstances surrounding France and the e-Zone situation are not likely to foster optimism. France for one has some burgeoning budget issues it will have to address that are much more likely to stifle growth. Still, the Insee measure produces an increase this month. I’d say to be wary of that. It is unlikely to signal a change in trend.

INSEE Industry Survey
  2012 Since Jan 1990 Since Jan 1990
  Aug Jul Jun May Pct Rank Max Min Range Mean
Climate 90 89 91 93 36.8 227 126 69 57 100
Recent Trend -44 -44 -35 -30 23.0 243 43 -70 113 -9
Likely Trend -8 -10 -5 -3 38.3 232 29 -31 60 5
Ord&Demand -33 -30 -33 -29 34.0 218 33 -67 100 -17
FgnOrd&Demand -28 -37 -30 -28 38.7 205 45 -74 119 -13
Likely Sales Price Trend 3 0 0 1 55.4 134 28 -28 56 3
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