In August 2017, the French business climate keeps improving and the employment climate falters againBusiness climate indicator and turning point indicator - August 2017

In August 2017, the business climate has improved for the fourth consecutive month. The composite indicator, compiled from the answers of business managers in the main sectors, has gained one point again (109). It has reached an unprecedented level since April 2011. Its upward trend since the beginning of the year has been confirmed (+5 points since January). This month, the climate indicator has risen by two points in services, standing well above its long-term mean. It has increased by three points in manufacturing industry, to its highest level since December 2007. On the other hand, it has lost four points in retail trade, though remaining markedly above its long-term mean. It has edged down in building construction.

Informations rapides
No 219
Paru le : 24/08/2017
Prochaine parution le : 26/09/2017 at 08:45 - September 2017

The French business climate has reached a level unseen since April 2011

In August 2017, the business climate has improved for the fourth consecutive month. The composite indicator, compiled from the answers of business managers in the main sectors, has gained one point again (109). It has reached an unprecedented level since April 2011. Its upward trend since the beginning of the year has been confirmed (+5 points since January). This month, the climate indicator has risen by two points in services, standing well above its long-term mean. It has increased by three points in manufacturing industry, to its highest level since December 2007. On the other hand, it has lost four points in retail trade, though remaining markedly above its long-term mean. It has edged down in building construction.

The employment climate falters slightly again

As in July, the employment climate has slightly worsened in August 2017, mainly because of the service sectors excluding temporary employment, and despite the improvement in the balances of opinion on expected employment in retail trade and manufacturing industry. The associated composite indicator has lost two points to 105, coming back to its February 2017 level which was still clearly above its normal.

Revisions

Compared to its first estimate, the business climate indicator of July 2017 has been lowered by one point in manufacturing industry because of the integration of late businesses' answers.

Graph 1 – French business climate composite indicator

Graph 2 – French employment climate composite indicator

Table 1 – Business and employment climates

Business and employment climates
April 17 May 17 June 17 July 17 Aug. 17
Business climates
France 104 105 107 108 109
Manufacturing 108 109 109 108 111
Building 100 103 104 105 104
Services 104 102 103 104 106
Retail trade 104 106 111 112 108
Wholesale trade - 105 - 109 -
Employment climate
Employment 107 107 109 107 105
  • Source: INSEE, Business tendency surveys

The turning point indicator remains in the favourable area

The turning point indicator for the French economy as a whole remains in the area showing a favourable short-term economic outlook.

Table 2 – Turning point indicators

Turning point indicators
April 17 May 17 June 17 July 17 Aug. 17
France 0.3 0.3 0.8 0.6 0.8
Manufacturing 0.2 0.7 0.6 0.5 0.6
Building 0.8 0.9 1.0 1.0 0.7
Services 0.8 0.4 0.9 0.8 0.8
Wholesale trade - 0.8 - 0.9 -
  • Source: INSEE, Business tendency surveys

Graph 3 – Turning point indicator

  • Close to +1 (resp. –1): favourable business climate (unfavourable), between +0.3 and –0.3: uncertainty area.

Documentation

Abbreviated Methodology (pdf, 130 Ko)