(Adds economist quotes, details)
By Tamora Vidaillet
PARIS, April 23 (Reuters) - Business morale in France recovered from recent lows in April as an influential survey showed private sector activity shrinking at a slower pace, fuelling hopes that the intensity of recession may be weakening.
The monthly business confidence index published by national statistics office INSEE rose to 71 in April from an unrevised 68 in March, according to figures published on Thursday, beating analysts' expectations for a reading of 69.
It was the latest sign, following glimmers of hope offered by other economic data, that the worst in terms of the pace of contraction may have occurred even if unemployment is set to soar and global growth is unlikely to return for months.
"Business morale had been largely in continuous decline since April 2008...Now, not only do we have an improvement but a strong improvement of three points which confirms that the worst is behind us," said Marc Touati of brokerage Global Equities.
Analysts zoomed in on a leap in figures for the general business outlook, which improved to -18 from -66 in March.
But some cautioned that the bounce may have been technical in nature following plummeting output whose recent pace could not be sustained.
"Mathematically, it is impossible to do minus 60 percent for several quarters in a row. There has to be a moment where we hit zero," said Nicolas Bouzou, an economist with Asteres, of the recent decline in production in certain sectors.
PAIN SEEN ENDURING
Other data published on Thursday also gave grounds for hope in the euro zone's second-biggest economy, with a key survey showing that the pace of decline in private sector activity moderated further in April.
A flash estimate of the Markit/CDAF composite purchasing managers' index (PMI) -- which combines data from firms in the services and manufacturing sectors -- rose for the second straight month to 43.5 in April after hitting 41.4 in March.
A reading below 50 still indicates a contraction, but April's improvement in the index outstripped expectations, taking the measure of private-sector activity to its highest level in six months, Markit said.
While the mood may be improving, economists stressed that recession in France and elsewhere was likely to prove prolonged given still anaemic demand and mounting job losses.
Many employees in France remain downbeat about their job prospects and worker resistance to mass layoff plans has become more radical, with an increasing number of bosses being forcibly detained by staff seeking better redundancy terms.
In the latest incident, staff at a factory run by U.S.
electronic components maker Molex
Even if growth returns to France from the fourth quarter, as many expect, quarterly growth rates of around 0.5 percent are unlikely before 2011, said Laurent Bilke, a senior economist with Nomura International in London.
"I think there is a good chance the recession will be prolonged, more prolonged than we think. In terms of intensity, it is possible the worst was in Q4, Q1," he said. (For a table of business confidence data, please double click on [ID:nPAB004762] (For a separate story on the PMI data, please double click on [ID:nLAG003395] (Additional reporting by Vicky Buffery and Francois Murphy; (Editing by Toby Chopra)