French business confidence, manufacturing down

23rd November 2011, Comments 0 comments

French business confidence fell slightly in November, France's state statistics institute INSEE said on Wednesday, with business leaders expressing a more pessimistic outlook for the economy.

French manufacturing also contracted in November for the second straight month but less than in October, according to the manufacturing purchasing managers' PMI index published by private firm Markit.

INSEE's business climate index, based on a survey of business leader sentiment, fell two points to 95 points in November from 97 in October.

As recently as July, the index stood at 105 points, above the long-term average of 100 points. During the worst of the crisis in 2008, the index sank as low as 70 points before pushing to above 100 points in 2010.

Another indicator based on surveys of managers in France's major business sectors also fell to well below average in November.

Industrial manufacturers said that inventories of finished products were up during the period.

Long-term orders were holding, they said, though orders for exports were dwindling.

Farming sector activity continued to rise over recent months, while activity in other sectors -- including electricals, IT, electronics and machinery -- progressed slightly.

Activity in the auto section was deemed dynamic and was above its long term average, INSEE said.

The manufacturing purchasing managers' index rose to 48.7 points in November, up from 45.6 in October, but remained below the 50 point level, indicating a contraction, private firm Markit said.

"PMI data from the these last two months seems to indicate an increasingly large risk of contraction of Gross Domestic Product in the last quarter," Markit economist Jack Kennedy said.

The PMI manufacturing index is watched as an important leading indicator of performance of the economy.

© 2011 AFP

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