THE French economy looks set to stumble along over the coming years, as statistics body INSEE published a report covering the country as well as Europe and the wider world.
Growth in France is expected to reach 1.5% in both 2016 and 2017, down on previous forecasts, while this year is only set to see growth of one percent.
Other highlights from the report include:
As expected, activity progressed little in France at the end of 2014
In Q4, activity grew only slightly in France (+0.1% after +0.3%), as expected in Conjoncture in France in December 2014. The slowdown was partly due to the marked fall in energy production (-2.5% after +1.7%), under the effect of the mild autumn temperatures.
Manufacturing output fell back slightly (-0.1% after +0.6%), notably due to transport equipment (-2.8%), while activity was dynamic in capital goods (+1.5%). Output barely slowed in market services (+0.4% after +0.5%) and in trade (+0.5% after +0.9%). Construction activity, however, contracted again sharply (-0.8% after -1.0%).
The business climate in France has progressed only slightly since November
After deteriorating in summer 2014, the business climate in France improved again in November, returning to the same level as in H1 2014. The business climate in France has progressed only slightly since then, to a level (96 in March 2015) that is still below its long-term average (100).
The French economy should accelerate a little in H1 2015
According to business leaders in services surveyed in March, the business climate still remains relatively morose and activity in market-sector services should progress in H1 at a rate close to its average since 2010 (+0.4% per quarter on average).
After a sharp fall in Q4 2014 (-2.5%), when mild autumn temperatures reduced heating expenditure, energy production should rebound considerably in Q1 (+2.9%), before returning to a rate closer to its trend in Q2 (+0.6%).
Finally, the fall in activity in construction should barely ease in H1 2015 (-0.7% then -0.6% after -0.8% at the end of 2014): investment in new housing should fall less in H1 2015 than in 2014, but the continuing fall in building permits for non-residential buildings provides no sign of any clear improvement.
The unemployment rate should reach 10.6% in mid-2015
In Q4 2014, the unemployment rate stood at 10.4% of the labour force on average (10.0% in Metropolitan France), after 10.3% in the previous quarter.
In H1 2015, the expected slight rise in employment is unlikely to be enough to offset the growth in the labour force and the number of unemployed should rise slightly.
The unemployment rate should increase again and could reach 10.6% by mid-2015.