Confidence Among French Manufacturers Stays at Record Low Levels

Confidence among French manufacturers in March remained at the all time low of 68 recorded in February, as can be seen in the first chart that shows the historical record of the series.

(INSEE, the National Institute of Statistics and Economics of France, computes a synthetic indexes to measure confidence in overall business, based on composite synthetic indexes for industry, construction. services and retail and wholesale trade. The indexes are so constructed that they have an average of 100 and a standard deviation of 10. They are based on the replies of the respondents to a survey regarding their recent output, orders, inventories and opinions about the future of production and prices for their own business and business in general. These replies are recorded in percent balances, the difference between the percent expecting increases and the percent expecting decreases.)

Given that the index was unchanged from February to March, there were only very small, offsetting changes in the percent balances of the items that make up the index, as can be seen in the table below. The largest change was the 6 point improvement in the outlook for production in general business, from -76% to -70%. The respondents were also more positive on production in their own business and reported a one point decline in inventories, which in view of the low demand, is a positive. The rest of the components showed more negative balances. The negative percent balance on recent changes in output, increased from -49% in February to -51% in March, that for total order books went from -67% to -69%, and for export order books, from -72% to -73%. To put the current percent balances in perspective, the second chart shows the historical record of the percent balances for two of the components of the overall index--the recent changes in output and total order books and demand.