Confidence among French businesses surged to the highest levels seen since the beginning of the pandemic during August as the country emerged out of lockdown and resumed normal levels of activity. According to latest data released by INSEE, the monthly business climate index soared to 91.1 for the month of August from 84.3 in the previous month.

Pent-up demand from consumers in the aftermath of the lockdowns was the main driver helping business confidence levels rise in August. However, the personal outlook among business leaders is showing signs of weakness, an indicator that they consider this rebound to be a temporary instance.

Even though the government eased lockdown measures, France is now experiencing a resurgence in coronavirus cases as people head out on Sunday vacations across the country. This has increased concerns that France could see a second wave of infections over the coming months, which could once again send the country into lockdown and impact business confidence.

Another survey by INSEE reveals that French industrial firms are expected to cut down their investments by 11% this year, a more severe reduction than their previous plans for a 7% cut, indicated during the previous edition of the poll back in April. The uncertainty fueled by the ongoing coronavirus crisis and the possibility of a second wave further delaying economic recovery are keeping businesses hesitant from getting too optimistic about their outlook.