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Economy in Brief

France Shows Modest Upswing in Sentiment
by Robert Brusca  February 11, 2013

To be sure business sentiment in France is weak. But it is also engaged in a long swing higher and it continues to extend that trend with a gain in January despite a number of internal readings that warn us that the strength in this report may not be so widespread...

French industrial sentiment in the Bank of France survey rose to 94.89 in January from 94.32 in December. The index is below the level of 100 which is its long term average. At its January level the BoF sentiment indicator sits at the 22nd percentile of its range, going back to May of 1989. That standing implies that the index has only been lower about 22% of the time positioning it between the bottom one fourth and one fifth segments of its range.

Several readings in the index, however, did get worse on the month. The index for total industrial production fell to -4.97 from +2.26 and now resides in the lower 7% of its historic queue of values.

Overall order book evaluation fell sharply to -10.67 from -6.7 to a 25Th percentile standing in its queue. Foreign orders weakened to an even weaker standing at the 18th percentile of their queue.

Total new industry orders collapsed to -3.87 in January from +10.7 in December. That reading is a bottom 10 percent of queue standing.

The hiring and outlook indices also worked lower to a 70th percentile standing for the current month and a 76th percentile standing for the hiring outlook. While weaker on the month the outlook for hiring has not turned as low as some of the industry gauges.

The overall business survey is much stronger than the assessments across many of the components of the survey. The French economy remains under great pressure. In the PMI framework from Markit French manufacturing was one of the few large core EMU readings showing a deeper set back to its MFG sector.

Bank of France Monthly Industry Survey: Summary
Jan-13 Dec-12 Nov-12 12-mo Avg. Since Oct-88
Percentile of
Ranked Values
Production-Latest Month
  Total Industry -4.97 2.26 -0.05 -1 6 7.7%
Production Outlook
  Total Industry 2.49 1.05 -0.52 0 6 22.5%
  Overall Order Books -10.67 -6.7 -8.74 -5 2 25.6%
  Foreign Orders 0.46 9.04 2.33 0 7 18.9%
New Orders; Change
  Total Industry -3.87 10.7 -1.02 -1 7 9.8%
Stocks: Finished Goods
  Total Industry -3.4 -6.62 -3.63 -3 -2 27.7%
Capacity Utilization 75.19 76.13 76.3 77 78 6.7%
  Latest Month -0.26 -1.1 -2.79 -2 0 70.2%
  Outlook -2.33 -1.47 -2.54 -2 -1 76.8%
Industry Sentiment Index 94.89 94.32 90.91 93 97 22.5%
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