French business confidence climbed from a two-year low last month and industrial output increased in November, indicating the euro-region’s second-biggest economy may avoid a recession.
The Bank of France’s Business Sentiment Indicator (FRBSI) for manufacturers advanced to 96 from 95 in November, the lowest since September 2009. The reading suggests gross domestic product was unchanged in the fourth quarter, the central bank said today in a statement from Paris.
The euro region’s sovereign-debt crisis and slowing global growth are curbing investment and demand for French goods. Companies such as PSA Peugeot Citroen SA (UG) and Societe Generale SA are cutting jobs to cope with lower demand and the debt crisis.
“Europe is still in dangerous territory as the sovereign- debt crisis has turned into a crisis of confidence,” Elga Bartsch, chief European economist at Morgan Stanley in London, said in a note to clients. “A mild recession over the winter could turn into a deep one if a full-blown, area-wide credit crunch materializes.”
French factory output is also improving. Industrial production climbed 1.1 percent in November, lifted by electronics and refinery output, national statistics office Insee said today. Manufacturing production climbed 1.3 percent following a revised 0.2 percent increase in October.
