France’s [business][1] confidence was stable in March, as manufacturers turned optimistic regarding the overall production outlook, ahead of the announcement of a third lockdown in several regions to curb the spread of coronavirus infections.
The manufacturing business confidence index reading was 98, unchanged from February, survey data from Insee showed Thursday. The score is the highest since March last year, when it was at the same level.
Economists had expected a modest improvement in the index to 98 from February’s original score of 97.
The confidence reading remained below the long-term average of 100.
The survey data were collected between February 26 and March 22, which means a large part was before the March 18 announcement of the third lockdown for some regions.
Manufacturers’ general production expectations reached its highest point since October 2018 with the index rising to 6 from -7 in the previous month.
However, they lowered their opinion on their personal production prospects as well as order-books, especially in the automotive industry, the Insee said.
New restrictions announced on March 18 and implemented on March 20 will lead to a deterioration of the business climate in April, ING economist Charlotte de Montpellier said.
“If the [health][2] restrictions can indeed start to be lifted in the second quarter due to the progress of the vaccination campaign, we expect GDP to grow by around 5 percent for the year, below the government’s 6 percent target,” the economist added.
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