France: Business climate deteriorates but industry resists

The French business sentiment index deteriorated in April to 95, down two points in comparison to March.

This moderate decline was mainly due to a deterioration in the outlook for the service and retail sectors connected with the tightening of mobility measures, partially offset by a further improvement in business sentiment in industry.

In recent months, the trend observed in industry was confirmed in April: at 104 points, the business climate index returned to above its average. In this sector, the leading confidence composite indicators are green, notably order books and personal production prospects.

As a reminder, the third lockdown was decreed shortly after the publication of the March business climate index, which therefore did not take it into account.

Business climate holds up

The April data is obviously linked to the national lockdown order issued on 31 March to combat the spread of the virus.

However, the prophylactic measures for 2021 are not as strict as those for 2020. They are also accompanied by an adaptation of economic actors to maintain production and an acceleration of the vaccination campaign (target of 10 million more people vaccinated per month until mid-June), which may explain the resistance of the index compared to the previous month.

The April PMI indices, released at the end of the week, should confirm this trend.

Source: France: Business climate deteriorates but industry resists | Snap | ING Think