French business confidence fell this month, official figures showed today, bucking rises in German firms' morale and French consumer spending to cast doubt over the strength of the euro zone recovery.
France's national statistics office, INSEE, said its monthly index based on interviews with business leaders fell to 104 from 105 in November, hitting its lowest level since June.
The fall was in line with the mid-range forecast in a Reuters poll of 20 economists for a reading of 104.
"According to the company chiefs, manufacturing industry activity slowed during the last three months but should firm up in the coming three months," INSEE said in a statement accompanying the survey.
The downbeat readout contrasted with a rise in German business confidence, which the Ifo institute last week said hit its highest level in eight months in December.
Together, Germany and France account for about half the euro zone's output. A report on Tuesday showing a fall in Italian consumer confidence in December added to the mixed euro zone picture.
INSEE last week forecast the French economy would grow by 0.6 percent in the fourth quarter of this year, rebounding from the July-September period when it grew just 0.1 per cent. But the statistics office cut its 2004 growth forecast to 2.1 per cent from 2.4 per cent previously. The Bank of France has also scaled back its 2004 growth estimate to 2.2 percent.