Global| Aug 29 2012French Climate Downward Revision Creates Appearance of Gain in August
Summary
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 [...]
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 |
| Production | ||||||||||
| 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 | ||||||||||
| 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 |
| Prices | ||||||||||
| Likely Sales Price Trend | 3 | 0 | 0 | 1 | 55.4 | 134 | 28 | -28 | 56 | 3 |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
More Economy in Brief
