French manufacturing sentiment saw a sharper-than-anticipated decline in January due to decreasing orders, according to findings released by the statistical office INSEE on Thursday.
The manufacturing sentiment index fell to 95 in January from 97 in December, whereas forecasts had predicted a dip to only 96. The indicators related to order book levels, both overall and foreign, dropped significantly, particularly influenced by the manufacturing of "other transport equipment."
Conversely, the index for past production bounced back in January, climbing to -1 from -9. However, the assessment of current finished goods inventory levels showed a decline, with the relevant indicator falling to 10 from 15 in the prior month.
The survey highlighted a severe decline in business managers' perspectives on order books, with the balance plummeting to -27 from -18. Similarly, foreign order books decreased to -19 from -8.
Despite this, the indicators reflecting production and overall production expectations improved in January. The index for general production prospects in industry began to rise anew after three months of decline, recording a figure of -15 compared to -19 the preceding month. The personal production outlook shifted positively to +1, up from -1 in December.
Additionally, business leaders reported a decrease in economic uncertainty, with the index dropping to 29 from 32. In the labor market context, opinions on recent workforce size declined again, with the gauge slipping to -5 from -3, while the index for expected workforce size remained steady at -1.
The balance regarding expected selling price trends for the next three months rebounded strongly, as the index rose to 9 from 2. Slight improvements were noted across major sectors, including manufacturing, construction, services, and retail and wholesale trade, leading to a marginal increase in the overall business confidence index to 95 from 94 the previous month.
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