PARIS (AFP) — French industrialists are the gloomiest about business prospects for three years, a survey by the statistics institute INSEE showed on Thursday, pointing to a sharper economic slowdown in coming months.
The INSEE index of industrial confidence showed the sixth monthly fall running, slipping to 98 points from 101 points, revised down from 102 points, INSEE said.
Leaders in manufacturing reported an increase of inventories, and a fall in orders booked, INSEE said.
"In view of these personal views of production, activity is likely to continue to slowdown in coming months," INSEE commented.
At BNP Paribas, analyst Mathieu Kaiser commented that those surveyed also said that past production had slowed down and that demand from abroad "seems to be decelerating markedly, no doubt in connection with the slowdown in Germany and also the progressive slowdown in emerging countries."
He said: "The general outlook, representing the opinion of industrialists about industrial activity overall, is deteriorating sharply."
This measure had fallen by 19 points since June to the lowest level since 2003, he said.
He also noted that sales prices expected by business leaders continued to rise, and this was a sign that companies no longer had any margin with which to absorb the rise in the prices of energy and raw materials.
Falls in raw materials prices in the last two weeks would have to continue and even speed up if any significant easing of pressure on prices and margins in the short term were to be on the cards, he said.
At Natixis bank, Jean-Christophe Caffet said that "all sectors are affected by the negative trend."
However, the production of vehicles had rallied by four points after a slump of 27 points in June. But orders from abroad in the auto sector had "collapsed by 18 points to the lowest level for 12 years," he said.
"The decline of world demand and the rise of the European single currency in recent months have clearly affected the industrial outlook," he said, forseeing "a marked slowdown in the manufacturing sectors in coming months."
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