• French industrialists gloomy about business prospects

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    • Published in Business

    French business leaders and industrialists are deeply gloomy about their business prospects.

    Overall business sentiment in Germany, the second-biggest eurozone economy, has fallen to the lowest level for three years, figures released by the national statistics office INSEE showed.

     But the institute s barometer of sentiment in manufacturing industries was stable at 90 points in September, the same level as in August though still well below the long-term average of 100 points.

     INSEE s latest reading was slightly better than the 89 points it calculated in July however.

     Overall, the picture was a rather gloomier, with the general business climate turning in a one-point monthly drop to 86 points, the lowest level since it fell to 85 in September 2009.

     A breakdown of that data showed stronger sentiment in the services sector, stability in manufacturing and falls in the building sector, retail and wholesale trade.

     Looking at the overall index, Barclays economist Fabrice Montagne commented that the figure "still shows no signs of stabilisation or improvement."

     

    On Monday, the German economic institute Ifo said that its closely watched survey of the business climate in the biggest eurozone economy dropped unexpectedly in September for the fifth month running to 101.4 points.

     

    Analysts had expected an unchanged reading, hoping businesses would be more bullish after the European Central Bank announced unprecedented action earlier this month to stem the eurozone crisis.

     


    INSEE said that bosses in the manufacturing sector reported that their past activity had fallen sharply but that their order books were picking up. Orders placed from abroad were stable but not strong.

     

    Industrialists were gloomy about the outlook for production, reporting that their activity would continue to be flat in coming months, INSEE said. Their view of future prospects was close to extremely low levels recorded in 2009.

     

    Housing ministry figures showed meanwhile that the rate of new French home construction fell by 10.3 percent from June to August compared with the same period of last year.

     

    The number of building permits issued had also fallen, by 1.2 percent in the same period.

     

    Economics professor at Paris-Ouest university, Michel Mouillart, an expert on housing, told AFP: "For a quarter of a century and since the beginning of monthly statistics, the figure for the beginning of construction of apartments has never been so low."

     

    At the Italian bank UniCredit, economist Tullia Bucco felt that the latest manufacturing index showed "that momentum in manufacturing broadly stabilised at the end of the third quarter, portraying a more benign picture than the one conveyed by the preliminary manufacturing PMI.

     

    That had fallen sharply from 46.0 to 42.6 points, Bucco noted.

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