French industrial morale rose slightly more than expected in July to its highest in over a year, offering more evidence that a fragile recovery is taking hold in the euro zone's second-biggest economy.
The official INSEE statistics agency said its monthly industry morale indicator improved for the fourth month in a row to reach 95, beating economists' expectation for 94.
Though still some distance from a long-term average of 100, the increase brought the indicator to its highest point since May 2012.
An improving economic outlook prompted French President Francois Hollande to declare this month that recovery is underway though unemployment remains at record high levels.
Chiming in, the country’s Finance Minister Pierre Moscovici declared the recession was over, pointing to forecasts from the Bank of France and INSEE for growth of 0.2% in the second quarter compared to a contraction of 0.2% in the first.
"Now we need to work to transform this exit from recession into a genuine recovery," he said on Europe 1 radio, citing recent measures aimed at helping to finance companies.
ING economist Julien Manceaux said industrial production likely stabilised in the second quarter and would start to improve in the current quarter.
"Nevertheless, industrial production is currently still 10% lower than in 2008, meaning that the road to a full recovery is still long," he said.
INSEE's broader indicator of business confidence, including services and sectors such as retail and construction, rose more timidly than industrial morale, edging up to 87 from 86.
Services rose to 86 after stagnating for four months at 84, raising prospects that the biggest business sector in France is beginning to see an improvement.
