30 October 2001, 12:24  French Oct business confidence stabilises

PARIS, Oct 30 - French business morale steadied in October after a 15-month slide, beating forecasts, French statistics office INSEE said on Tuesday in the first set of figures collected entirely after the September 11 attacks on the United States.
INSEE said its "composite" measure of business confidence in the euro zone's second largest economy was 93 in October, the same as September, which was revised down from 94 originally. That put the index at its lowest level since July 1996.
The reading, which was based on a monthly survey of some 4,500 firms, marks the first time the figure held firm since morale begin to detoriate last year.
"It is completely at odds with what we have seen elsewhere and also against common sense," said David Naude, economist at Deutsche Bank.
"I strongly doubt that this can be seen as a bottoming-out. We are still in for some bad news," Naude said.
There were still signs of industry jitters in the general production outlook reading, which slid to -57 from -48 in September, hitting its lowest level since June 1993. The personal production outlook also continued to fall.
Economists polled by had forecast that business confidence would fall to 90 and production to -53.
Economists said business confidence may have been shored up by French consumer spending, which remained surprisingly resilient in September despite the kamikaze airliner attacks on New York and Washington.
"The orders and demand books are holding at the same levels. In the car industry and consumer goods, industry leaders foresee some improvement in the short-term," said Marc Touati, economist at Natexis Banques Populaires.
"This means consumption can remain the engine of French economic growth," he added. The euro was unchanged on the news, trading at 0.9053/57 against the dollar at 0841

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