French business confidence rose slightly in January to hit its highest level since May 2001 as industry leaders grew more optimistic about the general outlook for the eurozone's second biggest economy.
National statistics office INSEE said on Thursday its monthly index based on interviews with business leaders rose to 102 from 101 in December. The December figure was revised down from 102 previously reported.
The rise in business morale was slightly below market expectations. Economists polled by Reuters gave a mid-range forecast for a reading of 103.
"There is no reason to be alarmed," said Nicolas Claquin, economist at CCF. "The index is stabilising around its long-term average, which confirms that there is a rebound, but France is still fragile compared to its international partners."
In neighbouring Germany, France's biggest trading partner, business confidence rose more than expected in January, a report from the Ifo economic research institute showed on Tuesday.
The INSEE survey showed managers had mixed feelings about the economic outlook. The "personal business outlook" part of the composite indicator fell to six from seven in December, but the "general business outlook" component rose to 14 from eight.
"The general business outlook continues to improve, reflecting the improvement of the prevailing climate," INSEE said in a statement accompanying the survey.
The report backed up other recent signs of a tentative recovery in France. Earlier this month, the French central bank said industrial activity picked up slightly in December and that production should increase in the coming months.
Economists are looking to industry to drive the recovery in France as households, worried about unemployment, hold down spending. Consumer spending rose just 0.2 percent in December after a sharp drop the previous month.
Many French firms are more upbeat. Air Liquide, the world's leading maker of industrial gases, said on Wednesday sales momentum in the last three months of 2003 should carry over into 2004.
Comments
Comments are closed.