France Manufacturing Confidence Improves Slightly

(RTTNews) - Confidence among French manufacturers improved marginally for the third straight month in February, primarily due to an improvement in the assessment of the past production and the overall order book balance, survey results from the statistical office Insee showed on Wednesday.

The manufacturing confidence index rose to 104 in February from 103 in the previous month.

The sub-index measuring manufacturers' views towards past production strengthened to 16 in February from 11 in January, and the overall order book balance rose somewhat to -14 from -16.

General production expectations also improved in February, with the corresponding index rising to 0 from -7, while personal production expectations of manufacturers held steady at 14.

The finished-goods inventory balance rebounded from January, with the corresponding index standing rising by 4 points to 18 in February.

The index for the expected trend in selling prices in the next three months decreased further in February, as the relevant index stood at 28 versus 33 in December.

The concerns of business managers regarding economic conditions softened in February, as the corresponding index fell to 32 from 38.

The overall business confidence index that comprises the responses of business leaders from sectors, namely, manufacturing, construction, services, retail trade, and wholesale trade, also improved slightly from 102 to 103 in February.

Overall, the slight improvement in business confidence indicates the picture of a resilient and fairly solid French economy.

On the other hand, confidence among consumers fell in January amid rising inflationary pressures amid higher energy and food prices. In addition, household consumption is expected to remain weak in the coming months.

"Ultimately, the latest economic indicators for France suggest that activity is likely to be stronger than expected in the first quarter of 2023 and that a contraction in GDP should be avoided," Charlotte de Montpellier, a senior economist at ING Economics, said.

"Nevertheless, they do not dramatically change the outlook for the following quarters, where activity growth should remain rather weak," the economist added.