The hexagonal economic activity rebounded by 0.3% between July September. But the factors supporting growth should fade.
Little ray of sunshine for the government. The growth in the third quarter from the previous quarter was a slightly higher expectations of economists and the Bank of France . With + 0.3% increase in national wealth between July and September, it is on track to achieve the target average annual government of + 0.4%.
But the flats are still numerous. First, because it is only the first estimate of the INSEE (INSEE). And this figure is often revised later. The activity of the second quarter has just been downgraded: advertised as zero, it ultimately proved slightly negative (- 0.1%).
Support for public consumption …!
Secondly, because “it is a growth in sham based on temporary supports”, asserts François Cabau, an economist at the bank Barclays . Traditional motor activity in France, consumer spending remains low, with a slight increase of 0.2%. Government that is four times more dynamic, especially because of the consumption of drugs and health services by health insurance. But given the fiscal policy followed, “we can not absolutely count on in the coming quarters and years to come,” warns François Cabau.
More importantly, to reduce their expenditures, governments have mostly cut their investments (- 1.2%). “Local governments may reduce their investments in response to declining endowments that will bode well for the activity because of the multiplier effect of public investment on the business,” worries economist at Barclays .
The investment still depressed
In total, the investment is again down 0.6%. With a decline of 0.1%, companies obviously did not always want to bet on the future, even if the drop is less severe than in previous quarters. For households, they still invest less in housing (- 1.7%). “Private investment, the largest in terms of volume, is itself depressed the real estate sector and the general lack of confidence,” summarizes economist Barclays. The government has also taken emergency measures to try to revive the construction.
As for foreign trade, it takes again the activity down. While exports have rebounded slightly, the increase in imports is more than two times faster (+ 1.1%), evidence that companies operating in France are struggling to meet domestic demand. “In the short term there is anyway not much to expect from this side, since the recovery through a supply policy that may not have immediate effects,” puts François Cabau.
Over 34,000 jobs lost
The activity was actually saved by the change in business inventories (+ 0.3%), a trend that could be really positive if the economic environment suggest that it would continue. But Francois Cabau, activity indices of the fourth quarter rather indicate otherwise. “The contradictory political discourse continues to overburden the growth,” said the economist, who argues for a “confidence shock”.
“Beyond jolts from one quarter to another, activity picked up slightly, but still too low to ensure the creation of jobs necessary for our country,” was forced to admit Michel Sapin himself even in a statement. A first estimate of INSEE, wage employment in the non-farm business sector is indeed decreased again after a very slight rebound in the second quarter with 34,100 fewer jobs. The acting is generally a leading indicator of the trend, falling heavily, 4.2%.
The real risk is that the French economy is stuck for long. “If growth was 0.4% over the year, it will mean that she generally stagnated for three years at the same low level,” said Francois Cabau, pointing to the risk of a “permanent weakening” of growth potential, that is to say, sustainable given the economic fundamentals (productivity, population growth, technical progress).