French Manufacturing Confidence Falls to 13-Month LowJillian Ward
French factory confidence fell to the lowest in 13 months in August, adding to signs that the economy may struggle to grow after a stagnant first half.
A manufacturing-sentiment index slipped to 96, the lowest since July 2013, from 97 the previous month, the French national statistics office INSEE said today in Paris. That matched the median forecast of economists in a Bloomberg News survey. A separate business-confidence index also declined.
The latest evidence of weakness in the French economy comes as President Francois Hollande deals with a mutiny within his government over austerity. The economy failed to expand in the past two quarters and a survey last week showed manufacturing contracted for a fourth month in August.
“France has suffered from a confidence issue related to the lack of clear communication and clear economic policy strategy,” Apolline Menut, an economist at Barclays Plc in London, said in a note. While the formation of a new cabinet is an “important step,” there are “some risks regarding the ability of the government to deliver, as the majority remains slim and unstable in the lower house.”
Hollande, who has an approval rating of just 17 percent, and Prime Minister Manuel Valls replaced three ministers yesterday as they moved to end the cabinet revolt over spending cuts. The reshuffle followed the firing of Economy Minister Arnaud Montebourg, who called the administration’s deficit reduction “dogmatic” and accused it of stoking unemployment. Emmanuel Macron, 36 and a former presidential adviser, was named as Montebourg’s successor.