FRANCE DATA: Divergence Between Individual And Economy-wide Production Exp.

French manufacturing sentiment climbed to 99.5 in March, above the 95 (rounded) consensus and 96.1 prior. The improvement diverges from the April flash manufacturing PMI, which eased slightly to 48.2 (vs 48.5 prior).

• One notable detail is that personal production expectations rose to 10.8 from 6.3 prior. However, general (i.e. economy-wide) production expectations slipped to -15.5 (vs -11.4 prior).
• There are two possible interpretations for this divergence: Either individual companies are underestimating the impact heightened US tariff barriers may have on their production, or that they are overestimating the aggregate impact tariffs may have more broadly. Unfortunately, such biases can be commonplace in soft survey data.
• Personal price expectations ticked up to 7.1 (vs 5.4 prior), continuing the gradual (and volatile) ascent from the December 2023 low of -3.6.
• Export orders rose to -17.4 (vs -21.2 prior). This chimes with the April flash PMI: “New orders from abroad recorded their smallest decline since August 2022"..."this slowdown in the decline in export sales is explained by a strengthening of demand from Africa and parts of Europe".
• INSEE’s uncertainty indicator spiked back to 29.3, from 23.6 in March and 28.9 in February.