Morale among French businesses fell slightly in March, data showed on Monday, but bosses said they were optimistic about future growth in a sign mass student protests have not yet dented their confidence about the economy.
State statistics office INSEE said its monthly index based on interviews with business leaders hit 105 in March from an upwardly revised 106 in February. The data were in line with economists' expectations.
"According to business chiefs ... industrial growth is moving in the right direction overall," the report said.
The index was pulled down by disappointing numbers for company order books. Overall orders dropped to -9 from -8 and foreign orders fell to +5 from +9 in February.
"Its rather a negative signal," said Emmanuel Ferry, economist at Exane BNP Paribas. "French industry is underperforming compared to global industrial demand."
In its quarterly growth outlook last week, INSEE said a gloomy outlook in the industrial sector was leading firms to defer investments.
Ferry said the report did not show signs that business sentiment had been hurt by recent protests.
"The foreign order book doesn't have much to do with the protests, we'll see it in the consumer data," Ferry said.
The first major protest against a contested youth job law was on March 7 and since then hundreds of thousands of students and workers have taken to the streets to demand the contract be scrapped.
Trade unions have called for a national strike on Tuesday.
The contract allows companies to fire under-26-year-olds within their first two-years of work without reason. Opponents say it will create a generation of disposable workers.
The Medef business leaders' group warned Prime Minister Dominique de Villepin on Friday that violence that has marred some protests was endangering the French economy.
The government has made reducing unemployment and boosting economic confidence a top priority. It is expecting growth of between 2 and 2.5 percent this year.
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