Economy in Brief: 2026

The Confederation of British Industry (CBI) shows business optimism falling sharply in Q2 2026, joined by a drop in export optimism. Expectations for capital goods spending excluding buildings improved slightly on the quarter, with the index reading rising to -38 from -44. Expectations for capital spending excluding equipment fell significantly to -36 in the second quarter from -22 in the first quarter. The two capital spending measures each have rankings below the 20th percentile; for capital spending excluding buildings, the figure is extremely weak.

The number employed over the last three months shows a slight decline to -19 from -16; however looking ahead to the next three months, the decline repeats, falling to -26 from -18 in the first quarter. The rankings for these two metrics are both in the low 30th percentiles.

New order volume for three months ago and three months ahead remain weak, with the three-month ago reading stuck at -21 and the three-month-ahead reading falling from -12 in the first quarter to -31 in the second quarter. The rankings for these two metrics are each at the 15th percentile or lower.

The volume of domestic orders for three months ago edged slightly lower, to -25 from -23; however for three months ahead it weakens more sharply to -32 from -17. Both of these metrics have rankings at the 15th percentile or weaker.

The volume for foreign orders from three months ago improved to -4 from -12. The volume for three months ahead has weakened only slightly, from +1 in the first quarter to -2 in the second quarter. The three-month-ago reading has a 35th percentile ranking, while the three-month-ahead ranking is at its 47th percentile. The foreign sector appears to be carrying some stimulus to the U.K. economy.

The volume of output from three months ago was slightly weaker in the second quarter, while the volume of output for three months ahead is expected to weaken from a -14 reading in Q1 to -20 in Q2. Both metrics have a lower 10th percentile standing.

The average cost of output three months ago rose sharply to an index reading of in the second quarter 54 from 33 in the first quarter. Looking ahead to the next three months, another ratchet up is in progress, to a reading of 79 from 50 in the first quarter. These are suddenly extremely strong readings, with three-months-ago reading at a 78th percentile standing and the three-month-ahead reading at essentially a 90th percentile standing.

The average price for domestic orders three months ago has gone up from an index value of 2 in the first quarter to 17 in the second quarter, while the average price for domestic orders for three months ahead edged up to a reading of +32 from +29 in the first quarter. The three-month-ago reading has a 53rd percentile standing, while the three-month-ahead reading has an 89th percentile standing. Price expectations are hot.

The average price on foreign orders for three months ago rose from -4 in the first quarter to +15 in the second quarter, logging a 49th percentile standing, pretty close to its historic median. The average price for foreign output for three months ahead moved down to +19 from +23 in the first quarter and has a very strong 91.8 percentile standing. The Q/Q pressure eased a bit but remains intense.

The French manufacturing climate index improved in May, rising to 102.3 after climbing to 100.4 in April from 99.4 in March.

Despite the improvement, the standing of the climate index is only at its 50.4 percentile, leaving it just slightly above its historic median on data back to 2001. Industry climate now is still slightly lower than it was in January 2020, just before COVID hit.

The survey components tell a mixed story about prospects for industry in France. Manufacturing production expectations improved slightly in May, moving to -17.0 from -17.4 in April; however, both readings were sharply weaker than the value in March. The standing of production expectations in May is at its 25.4 percentile, marking it as just a hair above its lower quartile when ranked on data back to 2001. This is a weak and uninspiring showing.

The recent trend of production is much more upbeat, rising to 14.3 in May from 3.6 in April. It also shows a sharp improvement compared to a year ago, when the value was 3.7. Its standing is significantly above its historic mean, and the ranking for this May observation is at its 82nd percentile—a solid showing. It is the strongest response in the survey among demand and activity variables. But can that trend hold?

The personal likely trend, in which survey respondents respond to prospects for their own firms and industries, shows much less ebullience, with the May reading of 4.4 and a steadily diminishing trend from March to April to May. The personal likely trend is still stronger than a year ago, when it was -3.1, although it is significantly below its historic mean, with a ranking at its 28th percentile. It is a reading that is nearly completely decoupled from the recent trend responses in this same survey.

Orders and demand in May improved to -14.1 from -15 in April; in April, the index had improved from -18.2 in March. There is a similar trend and improvement for foreign orders and demand as well. Both overall and foreign demand are improved compared to a year ago; both are stronger than their historic means, and each of the series has a ranking in its 61st percentile—above their respective historic medians with some margin, enough to say the responses look firm. Yet, there is not enough to say they look strong. Both readings are still below their levels in January 2020, before COVID struck.

The INSEE survey also includes two observations on prices: the own-likely price trend and the manufacturing price trend. Both have been moving up sharply from March to April to May; both are significantly above their year-ago levels and relatively strong compared to their historic means. Both series also have high percentile rankings, with the own-likely price trend at a 90.2 percentile ranking and the manufacturing price level at an 88.5 percentile ranking. Both are also substantially above their levels of January in 2020, before COVID struck.