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French Manufacturing Sentiment Strongest Since 2018

French manufacturing confidence strengthened to the highest level in more than three years in July largely driven by the assessment of foreign orders and personal production expectations, survey results from the statistical office Insee showed on Thursday.

The manufacturing sentiment index advanced to 110 in July from 108 in June. This was the highest score since April 2018 and above economists' forecast of 107.

The overall order book balance rose to -2 in July from -7 in the previous month. Likewise, the balance of opinion on export order books advanced to -10 from -16.

Manufacturers are also being optimistic about their own production for the next three months. The corresponding balance advanced to 21 from 18 in June. Meanwhile, the general production expectations index fell to 20 in July from 25 in the previous month.

Regarding employment, the business managers' perception about their workforce size continued to improve. The balances of opinion on the past change fell to zero and on the expected change rose to 7 from 4.

More business leaders considered their inventory level lower than usual in July. The balance of opinion relative to the finished-goods inventories therefore clearly decreased.

The overall business confidence index that comprises the responses of business leaders from sectors namely, manufacturing, construction, services, retail trade and wholesale trade, dropped marginally to 113 in July from 114 in June.

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