French Assessment is Mixed between Manufacturing and Services
Industry climate improves slightly in December while for services the climate situation eroded. But both of the series are in a significant long term down trend from 2021 onward. Between Covid and the Russian invasion of Ukraine, the French economy has been under unrelenting pressure that recently appears to have taken on an even weaker dimension.
Manufacturing Production expectations weakened further in December from November after production expectations weakened in November as well. However, orders and demand show that overall order and foreign orders improved in December compared to November. The price outlook weakened for firms assessing their own pricing prospects but accelerated in evaluating the overall prospects for prices in manufacturing.
In terms of rankings… the rankings on all these categories are substantially below 50, a ranking that marks the historic median for each series. The only exceptions to this are two: foreign orders & demand that have a 68-percentile standing and inventories with a 78-percentile standing. Manufacturing in France is weak and while the industry climate reading moved up in December most components assessing the sector weakened in December.
Services
The service sector weakened in December, with the climate metric dropping by nearly two points. Climate’s standing fell to its 26th percentile – its moving averages are in the 30-percentile range indicating that it has been weak in this region for ‘some time.’
Overall, several climate readings did improve month-to-month. The 3-month observed reading for sales improved, the 3-month price trend firmed, and the expected price trend for three-months ahead firmed as well. But the rest of the metrics weakened. Mover while a "firming" in the price trend might be good from a firm’s standpoint, from the perspective of inflation the opposite is true - and sales prices already have a 62-percetile standing for 3-mo observed trends and an 8-percentile standing for the expected trend.
The outlook deteriorated month-to-month dropping to -10 from -8. Expected sales also were set-back, logging a -3 reading after -1 in November. Employment fell back to -7 from -3 in November while expected employment fell to -6 from -4. Except for prices all rankings are below the 50% level that denotes the historic median. Expectations and current employment are particularly weak, as are expected-sales.
France logs weak numbers generally amid trending weakness and some political instability. It exhibits some of the same problems and trends we are seeing in Germany and in the UK. Europe is struggling and France is no exception.
Services
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.
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