French companies' business confidence in the manufacturing sector fell unexpectedly in January to 91 from an unrevised 94 in December, national statistics office INSEE said on Monday, January 23.

The figure, well below the long-term average of 100 and the lowest result since a reading of 89 in February 2010, fell short of an average forecast of economists' expectations for a slight rise to 95, Reuters reported.

The composite index gauges business cycle sentiment by combining the survey's seven main components: stocks, past production levels, total and foreign order book levels, personal price and production outlooks and views on general production. Each component is calculated by adding together the percentage of survey respondents with a positive opinion and the percentage of respondents with a negative opinion.

"The implementation of an austerity plan in January, poor international climate, and the unclear presidential campaign with no clear view about the favorite's platforms have not reassured the French business sector. The retail sector seems particularly depressed with a fall to 89 from 93 in December, a particular bad sign just at the beginning of the winter sale season. Independent of the economic situation, without a clearer political campaign and clearer positioning of the candidates, business confidence should continue to suffer," an Economist Manuel Maleki stated, commenting on poll results.

"Although disappointing, the January outcome aligns the INSEE business confidence with the manufacturing PMI, which had fallen more sharply since last summer, but had already shown signs of recovery in December. Accordingly, we will be looking closely at tomorrow's January PMIs to find a confirmation that the worst in terms of GDP growth could be behind us. For the time being, the INSEE points to broadly flat GDP growth at the beginning of Q1," Tullia Bucco, an expert at UniCredit banking organisation noted.