French manufacturers' confidence this month unexpectedly dropped to the lowest level since November 2001, increasing the chances that Europe's third-largest economy failed to grow in the second quarter.
An index based on a government survey of about 2,000 companies dropped to a reading of 90 from a revised 92 in May, national statistics office Insee said in Paris. Economists had expected an increase in the index to 94.
The drop in French business confidence, amplified by strikes against planned changes to the pension system, contrasts with increased optimism among companies in Germany and Italy. Consumer spending, which helped Europe's third-largest economy expand in the first quarter, slumped the most in almost four years in May.