French Factory Confidence Falls to Lowest in Almost Four Years

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Confidence in France’s manufacturing sector dropped unexpectedly to its lowest level in nearly four years as business leaders’ assessment of their own production slumped.

The declining sentiment casts doubt over the economy’s recovery from the disruption of the Yellow Vest protests and its resilience to global trade tensions. A survey last week indicated manufacturing shrank again at the start of the second quarter.

French Factory Confidence Falls to Lowest in Almost Four Years

French economic growth will probably cool to 1.2 percent this year from 1.5 percent in 2018 amid a broad slowdown across the euro area. President Emmanuel Macron has injected around 10 billion euros of stimulus to respond to the protests, and is expected to announce more measures Thursday to try to restore calm. But the stimulus targets households and taxes on businesses are in part financing it.

French statistics agency Insee said manufacturing confidence fell to 101.1 in April, bringing it closer to the long term average of 100 and the lowest level since June 2015. The fall in the measure of recent output accelerated and is now below its long-term average. Executives also became gloomier about the outlook for their own businesses.

Beyond manufacturing, a broader measure of business confidence covering the whole economy was stable in April, helped by an improvement in retailing.

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