French business confidence to improve in April

The French National Statistical Institute (INSEE) business confidence index for the whole economy is expected to improve slightly in April from previous 96, while the manufacturing index should remain unchanged for a fifth consecutive month at 99. Historically, the 97 reading for the whole economy indicator is consistent with a GDP growth rate of 0.35% qoq.

French business leaders still need to be convinced that all these positives can materialise into a solid recovery. "Our GDP forecast for 2015 is consistent with the INSEE business confidence index, improving gradually to 100 by mid-year", says Societe Generale. 

Continuing improvement is expected over the coming months. Lower oil prices and a weaker euro should play out, while government measures including tax cuts (CICE) should also start to positively impact business confidence.

Nevertheless, these positives are not significant enough to boost the INSEE business survey above historical levels (100).