Morale in France's manufacturing sector hit its highest level in 19 months in March as doubts over future output and foreign orders eased, along with concerns the recovery in the euro zone's second biggest economy might be flagging. National statistics office INSEE said on Tuesday its monthly business confidence indicator for March was 94, up three points on February to reach its highest level since August 2008.
Analysts had forecast the indicator would rise to just 92. A flash March estimate for the purchasing managers' index (PMI) is due out on Wednesday. March's business confidence reading was still six points beneath the long-term average for the overall index, but INSEE said firms' outlook for their own production had jumped in March with the index rising to +3 from a previous -4.
There was also a marked climb for the index monitoring foreign orders, which rose to -43 from -52 in February. France has expressed concerns its competitiveness and that of other euro zone countries was being threatened by Germany's huge trade surplus, with Economy Minister Christine Lagarde earlier this month urging Berlin to do more to reduce its reliance on exports.