French Biz Confidence Hovers Just Short of Recent Highs

France’s business climate indicator is steady this month at 109; over 12 months the index is rising at a steady 2.8% annual rate. Still there is no sign of advance in the index since March of 2007 when it has hovered between 108 and 111, which is the recent cycle high. At 109 the index is well above its average of 100. Still its components are showing more signs of softening. Placed in their respective ranges since 1990 the overall index stands in the top 30% in the seventy second percentile. The recent trend for industry at a raw reading of -5 is at the 52nd percentile level of range. The likely trend at 47 is in the 83rd percentile of its range or in the top 20% of it. French industrialists think the trend is going to improve significantly. Orders and demand stand in the top 30% of their range while foreign orders and demand are in the top third of their range. The likely price trend for sales is a borderline top 25% reading. The recent trend readings have deteriorated since October. Even so the likely trend reading has improved. The assessment of demand, both foreign and total, has eased but sporadically. On balance, for such a strong-seeming reading on the overall index, French industry has had some concerns lately. The main prop to the index is apparently expectations that conditions are about to improve. It’s hard to tell what that might be based on, given all the challenges to markets and policy. But it is there, embedded in the survey responses, nonetheless.