The Wall Street Journal reports: ''According to surveys of purchasing managers by Markit, economic activity in France contracted in January, though at a slower pace than previously. The PMI data also showed French firms' input prices rising and output prices falling, further squeezing their profit margins, which are already the lowest in Europe.
Statistics bureau Insee recorded business confidence in industry at 100 in January, the long-term average for the survey, and unchanged from the previous month'".
Boosting profit margins and the confidence of business leaders is a key plank of Mr Hollande's plan to promote growth in the french economy. But details of the pact—including the public spending cuts and tax cuts for employers—are yet to be laid out.
"Economics has a fundamentally psychological dimension: if everyone is mobilized around this grand social and economic compromise, confidence will come back, investment will accelerate and we will be able to do better than 1% [growth] in 2014," French finance minister Pierre Moscovici said an interview with French newspaper Le Monde last week.
The data Thursday suggest that renewed confidence is yet to take hold. In particular, Insee's survey of the services sector shows employers recruitment expectations haven't improved.
"The ultimate goal of the pact is employment. When you look at the Insee surveys, you can't see any improvement," said BNP Paribas economist Dominique Barbet.
The muted response in surveys comes despite an enthusiastic reaction to Mr. Hollande's change in tone from France's European peers, including Germany, as well as other observers.
Other analysts warn that it is hard to evaluate the impact until words are turned into deeds, with confidence unlikely to recover until hard data on the French economy improves.
