French business confidence declined unexpectedly this month, tacking a similar drop in confidence among German managers. An index of business sentiment fell to 92 in April from 95 in March, according to a monthly survey of industrialists carried out by statistics office Insee. Economists had expected the composite indicator remain steady at 95.
Yesterday, the closely watched Ifo business climate index in Germany dropped to 86.6 from 88.1 in March, against forecasts that it would rise for the third time in four months, to 88. Business confidence in Italy also declined in April, hitting its lowest since January 2002. The decline in confidence suggests that the end of the war in Iraq failed to provide any hope to managers about their companies' prospects and indicates that many businessmen anticipate a lengthy overhang from the conflict, which will maintain pressure on demand for goods. According to the French index, general output expectations among manufacturers fell to minus 59 in March from minus 53 in April. Overall order levels were minus 26 compared with minus 25 the month before, and the indicator for foreign order levels dropped to minus 30 from minus 21.//www.fxcentre.com