France: Improvement in Consensus Expectations


As mentioned last month, the Q2 national accounts released just after August’s survey deadline showed GDP advancing by a stronger-than-expected 0.5% (q-o-q). This followed falls of -0.2% in both Q4 2012 and Q1 2013 GDP. Our panel has now been able to incorporate the Q2 release into some of its forecasts, prompting an uptick in the 2013 GDP consensus. The 0.5% gain in Q2 growth was its largest increase since 2011, boosted by a 0.4% rise in household consumption. Unseasonably cold weather raised household’s heating bills while inventory-building also supported activity. However, the outlook for consumption remains lacklustre. Tax increases are weighing on households with more to come in 2014 (alongside planned public spending cuts). In addition, the jobless rate for metropolitan France rose from 10.1% in Q4 2012 to 10.4% in Q1 2013 and 10.5% in Q2. The employment survey collecting the jobless numbers was revamped in Q1, but the uptick is still significant. Unemployment forecasts have been downgraded, however, while 2013 consumption expectations have risen to +0.2% this month. Elsewhere, new car sales saw a 10.9% (y-o-y) pickup in August, although this derives from a low base. Indeed, excluding autos, retail commerce fell by 1.4% (m-o-m) in June, almost completely wiping out May’s 1.6% rise.

After May and June’s falls, manufacturing declined again in July, by 0.7% (m-o-m). Despite improved industrial sentiment and in the latest PMI, both indices continue to hover just below the break-even level. Encouragingly, manufacturing orders rose by 0.5% (m-o-m) in June after a 1.7% decline in May, boosted by a 2.2% surge in export orders. The 2013 production forecast has risen this month.

You can download a sample of Consensus Forecasts G-7 and Western Europe at

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