French manufacturing sentiment improves in January

Business climate for the manufacturing sector gains two points from December 2019 to reach long-term average of 100

                                

France’s manufacturing sector sentiment improved in January as business leaders became more optimistic about their order books.

According to the business managers surveyed by statistics agency Insee, the business climate for the manufacturing sector gained two points from December 2019, up to 100, its long term average.

French industrialists’ opinion on their overall order books has exceeded its long-term average, while sentiment on foreign order books has stayed slightly below, Insee said.

The improving business climate mood in the eurozone's second-largest economy follows a similar trend in Germany, where recent data showed that economic expectations have reached their highest since 2015.

The next key update for investors will be the release of consumer sentiment surveys in France and Germany on January 29.

France's longest continuous transport strike to protest against proposed pension reforms has already shaved up to 0.1 percentage points off fourth-quarter growth in 2019, the country’s central bank said this week as the protests entered their 42nd day.

This has already been included into the overall growth forecast of 0.2 per cent for the final quarter, Banque de France governor Francois Villeroy de Galhau told a parliamentary finance committee.

An estimated 10 per cent of businesses – mainly in the hotel, restaurant and transport industries – have been hit by the strike, he said, but declined to comment on the potential impact on the economy in 2020.

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