French manufacturing sentiment declines — Insee

Inflation and external economic challenges continue to restrain the growth of the French economy. In June, the Insee business sentiment index unexpectedly stood at 96 points, against the anticipated 98, according to data from the national statistical agency. The cause was weaker-than-expected demand and a slowdown in production rates.

The decline in the index served as an additional signal of the country's economic weakness, which is already lagging behind other eurozone nations. Insee experts point to the negative impact of trade tensions, subdued consumer demand, and the slow recovery of business investments.

Despite the decline in industry, the overall level of business confidence remained at 96. Improvements were observed in the services and trade sectors, partially offsetting the decline in the manufacturing sector. However, the slow growth of domestic demand and upcoming measures to reduce the budget deficit may limit further recovery, as noted by Bloomberg.