UPDATE: French business confidence has surged in December 2023, as new data reveals a significant boost in manufacturing sentiment. The composite business confidence estimate jumped to 98.7, marking its highest level since June 2024. This surge is primarily driven by a remarkable increase in manufacturing confidence, which rose to 102, up from 98 previously.
This positive shift in sentiment is crucial, as it signals a potential turning point for the French economy, which has been struggling for over a year. The latest report from INSEE indicates that while services confidence remained steady at 98, the overall business confidence is inching closer to the long-term average of 100. The last time the index reached this benchmark was in March 2023.
However, the report also highlights challenges ahead. Employment conditions showed signs of easing, with the index slipping to 95 from 96 in November. This decline is largely attributed to a downturn in future workforce size expectations within the services sector.
In a more encouraging note, the retail trade sector experienced a sharp rebound, with its index gaining seven points to 104, the highest since January 2024. This improvement is fueled by an increase in ordering intentions, hinting at a possible recovery in consumer demand.
Despite these positive developments, analysts caution that political uncertainty and instability will continue to pose significant challenges for France’s economic landscape as we move into 2026.
“The optimism surrounding improved business sentiment is welcome, but substantial headwinds remain,”
an INSEE spokesperson noted.
For now, inflation is not a pressing concern, yet domestic demand conditions continue to struggle. The latest data is seen as a glimmer of hope for businesses and consumers alike, as they seek stability in a fluctuating economic environment.
What happens next? Economists and policymakers will closely monitor these trends for signs of sustained recovery. The focus will be on whether this uptick in business confidence can translate into real economic growth in the coming months.
Stay tuned for further updates as the situation develops.
