INSEE French business sentiment likely to have remained firm in October

The INSEE French business sentiment is expected to have stayed firm in October. The INSEE survey, recently has shown a better picture of the French economy as compared to the PMIs, noted Societe Generale. However, the PMIs have momentum and this is expected to gradually close the gap. The services sector, in particular, has momentum.

However, there is no reason for the INSEE survey to converge downwards. Manufacturing sentiment is expected to remain at 103, more than the long-term average of 100, stated Societe Generale. There is enough room for improvement in other components such as construction and retail trad that might take the overall business climate print up to 103 as well.

“This would be a good start to 4Q and point to qoq GDP growth of around 0.5 percent – slightly above our current forecast (0.4 percent)”, added Societe Generale.