2010.11.2304:19:00UTC+00French Business Confidence Unexpectedly Weakens In November

Confidence among French manufacturers unexpectedly deteriorated in November as they revealed weak production outlook due to continuous fall in orders and demand.

Business sentiment fell for the first time in five months, to 100 in November from 102 in the previous month, according to a monthly survey from the statistical office Insee released on Tuesday. The reading was forecast to remain unchanged.

The latest index score is in line with long-term average. The turning point indicator went down to the neutral area, indicating an economic uncertainty, Insee said.

Survey participants said their past activity slowed down noticeably in November, after being very dynamic since last April. The level of stocks of finished products eased to zero from negative 2.

Demand and total order levels decreased again, to minus 28. However, export order books improved and approached their long term average.

Although declining, the personal production outlook for the next month remain at a high level. The reading was 11 in November, down from 16 in October. At the same time, the general production outlook, which represents business leaders' opinion on French industry as a whole, remained unchanged at 8.

In September, consumer spending rose 1.5% from the prior month led by a double-digit growth in car purchases. It is now forecast to increase at a slower pace of 0.2% in October. Data is due on November 26.

Despite an acceleration in household spending, GDP growth in the second largest eurozone economy moderated to 0.4% in the third quarter from 0.7% in the previous three months. The Bank of France sees 0.5% growth in the fourth quarter of this year.

Meanwhile, French private sector activity improved to a two-month high in November, Purchasing Managers' survey preliminary results from Markit Economics showed today. While, manufacturing activity rose to its highest level in ten years, the services sector growth came in at two-month high.

Copyright(c) 2010 News.com, Inc. All Rights Reserved