Clouds over France

France’s economy is coming to a standstill. The Conference Board Leading Economic Index (LEI) for France declined 0.6 percent in September to 112.8 (taking 2004 as benchmark), following a 0.5 percent decline in August, and a 0.3 percent decline in July.

The Conference Board Coincident Economic Index (CEI) for France, a measure of current economic activity, though, was unchanged in September at 105.6, following a 0.1 percent increase in August, and a 0.1 percent increase in July.

The Conference Board is an independent business membership and research association. The seven components of The Conference Board Leading Economic Index for France include: yield spread, 10 year minus day-day loan, stock price SBF 250 Index, residential building permits, new unemployment claims, industrial new orders, production expectations, and ratio deflator of manufacturing value added to unit labour cost.

The Conference Board LEI for France declined again in September, amid widespread weakness among its components. In addition, the LEI’s six-month growth rate became negative for the first time since May 2009.

At the same time, The Conference Board CEI for France has been on a slowly rising trend since reaching its most recent trough in August 2009, but its six-month growth rate has also moderated since the beginning of this year.  Taken together, the recent behavior of the composite indexes suggests that although current economic activity remains in positive territory, risks to economic growth are increasing in the near term.

* The complete data set is available here.