France: Slow but continuous recovery as shown by business confidence - ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 24, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Julien Manceaux, Research Analyst at ING, notes that in France, business confidence remained stable in November, at 102.0, above its long-term average.

    Key Quotes

    “Most companies answered however before the 11/13 Paris attacks. The results are different across sectors. Confidence decreased in manufacturing from 103.0 to 102.0 on the back of deteriorating domestic order books. The production outlook improved, and deflationary pressures seem to be abating in manufacturing. The level of stocks however remains high. Confidence remained constant in services, with the current business situation deteriorating for most companies. This may remain temporary however as future investment trends are positive again, for the first time since August.”

    “The main improvement in the survey came from the retail sector where confidence increased to 111, its highest level in years, on the back of higher expected demand and future activity. In the building sector, confidence remains low.”

    “All in all, the survey confirms that the pace of recovery is likely to remain low in France. Until now, we do not expect the 11/13 to have a large impact on the economy. November PMI’s (surveyed largely after the attacks) showed a limited downwards move yesterday, with the indicator remaining above 50.0, indicating an expansion of activity in November.”

    “Looking at the employment component of today’s survey, the picture looks encouraging, especially in the service sector, but not in every sector (retail and building sectors show no sign of more hiring intentions in coming months). We therefore expect the unemployed population to decrease only marginally in September (data to be published on Thursday), with an improvement only in the cards for 2016.”
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