PARIS -- After months of gloom and doom, French manufacturers have been in better spirits in November, taking heart from solid consumption patterns, stable oil prices and hopes for avoiding war in Iraq, official data showed Thursday. The French statistics agency Insee said: "Industrial leaders surveyed in November indicated that industrial conditions are no longer worsening." Insee said an index based on interviews with heads of French enterprises registered a slight increase -- from 93 in October to 96 -- in November, "interrupting a downward trend that has been in effect since mid-2002."

The institute also reported that another index in November pointed to the likelihood of an actual improvement in the industrial climate.

Insee's assessment offered a ray of light for the French economy, which has been slowing this year as business leaders cut spending on concerns about the global economy and geopolitical tensions, especially Iraq, AFP reported.

Analysts said the improvement in France's industrial outlook in November was due in part to a perceived recent easing of tension in the U.S.-Iraq conflict.

"The slight improvement in the international geopolitical climate has soothed worries that an armed conflict in Iraq was on the way," said Natexis Banques Populaires economist Alexandre Bourgeois.

But French industry -- unlike in Germany -- has also benefited from sustained household demand, which economists say has kept the French economy from shrinking in the third quarter.

In October, French household spending on manufactured products increased one percent from September when it had decreased 0.9 percent over one month.

Bourgeois said French industry had also gotten a boost from lower oil prices.

The price of oil has fallen from $29.1 per barrel in October -- when prices reached their highest level since December 2000 -- to $25.4 in November.

But prospects for the global economy had also improved in November, Exane economist Emmanuel Ferry said.

He said financial markets were showing a "renewed appetite for risk" and positive signs from the U.S. economy had diminished chances of a so-called double-dip recession and deflation.

In Europe, prospects for an interest rate cut by the European Central Bank had also improved the mood.

However, CCF economist Nicholas Claquin warned that the surprise improvement did not necessarily mean the French economy had turned the corner and was back on the road to recovery.

"There are still numerous uncertainties that have not been removed and given these circumstances, it is wise to remain cautious and not extrapolate a change of trend from the results," he said.

The Paris-based Organization for Economic Cooperation and Development has also sounded a cautious note about the French economy's prospects.

In a study released last Thursday, it predicted that the French economy would grow only 1.9 percent next year, bedeviled by rising unemployment, tepid growth and budgetary problems, before enjoying a possible rebound in 2004.

The OECD, private economists, the Bank of France and the European Commission also expect the French economy to show growth of 1.0 percent this year.

A senior government official acknowledged last week that growth this year was likely to be only "about one percent" whereas the last government estimate was 1.2 percent.