The business climate in France deteriorated somewhat in April, due to the blow to the activity of the services sector by the lockdowns, but economists continued to expect a strong recovery in overall economic growth in the second half of 2021.

INSEEThe overall business confidence gauge rose from 97.0 in March to 95.0 in April, as expected.

Services were the worst, with the corresponding sub-index of sentiment in space rising from 94.0 to 91.0, while that of retail specifically fell from 95.0 to 90.0 in February.

A gauge for manufacturing sentiment, on the other hand, fell from a revised upward 99.0 for the previous month to 104.0.

Commenting on the results of the survey, Claus Vistesen at Macroeconomics of the Pantheon noted the improvement in the forward-looking orders-to-inventory ratio, which climbed on the back of increased domestic and foreign demand.

Vistesen nevertheless anticipated a contraction in French gross domestic product growth in the first quarter of 0.0-0.5%, against the consensus which called for a small expansion – precisely because of weak services.

Nonetheless, he still predicted a “strong” recovery in GDP growth in the second half of the year.