PARIS: French business morale stood at its highest in nearly three years in March, data from statistics office INSEE showed on Wednesday, while morale in the industrial sector alone was close to the long-term average.
The composite indicator of business morale rose from 94 in February to 96, its highest level since April 2012. The more closely watched industrial morale reading edged slightly down to 99 from 100 last month, as expected by analysts surveyed by Reuters. The long-term average is 100 for both indicators.
"The increase in confidence is welcome and backs our view that activity in the French economy is likely to have accelerated during the first quarter of the year," IHS Global Insight analyst Diego Iscaro said. "Although we expect firms to remain relatively cautious regarding the economic outlook, we expect confidence to gradually improve over the coming months."
Markit's preliminary composite purchasing managers' index had shown on Tuesday that France's private sector expanded for the second straight month in March, chiming with recent data that shows the euro zone's second-largest economy is slowly pulling itself out of stagnation.
"This supports our view that growth in the French economy is improving a little in the first quarter. We expect first quarter GDP to grow 0.3 percent quarter-on-quarter following the fourth quarter's 0.1 percent," BNP Paribas economist Evelyn Herrmann said in a note.
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