French Business Sentiment Rises to Highest Since 2008
French business confidence unexpectedly climbed in December to its highest level since March 2008 as Europe’s third-largest economy extended its recovery from the recession.
The Bank of France’s Business Sentiment Indicator for manufacturing advanced to 101 from 99 in November, according to an e-mailed statement today. Economists had expected the measure to remain unchanged, according to the median of five forecasts gathered by Bloomberg News.
The Paris-based central bank said the data suggest economic expansion of 0.5 percent in the fourth quarter, a decrease of 0.1 percentage point from its previous estimate. Declines in gauges for capacity utilization, total orders and production countered an improvement in order books, the central bank said.
“Businesses still remain skeptical and want to see what happens in the economy,” said Laurence Boone, chief French economist at Barclays Capital in Paris.
Finance Minister Christine Lagarde said last week that the government hopes to raise its growth forecast to at least 1 percent for 2010 from 0.75 percent as the recovery gains pace.
Industrial production grew more than twice what economists expected in November, gaining 1.1 percent from the previous month, statistics agency Insee said yesterday.
French businesses are benefiting from the economy’s return to growth in the second quarter of 2009 as well as government stimulus programs, even as increases in the euro and unemployment threaten the expansion.
On Jan. 6, Sodexo, the world’s second-biggest catering company, reported a smaller first-quarter revenue decline than some analysts expected and confirmed its annual profit target.