France: Consensus Sees Upgrades Despite Poor Q3 Showing

Q3 GDP contracted after an upbeat Q2 showing. GDP fell by 0.1% (q-o-q) following a 0.5% rise, and moderated y-o-y from 0.5% in Q2 to a mere 0.2%. The recovery has experienced difficulty gaining traction after falling into recession at the end of 2012. Household consumption growth halved from 0.4% (q-o-q) in Q2 to 0.2%, although this was positive compared with business investment which fell 0.6% over the quarter. Exports also contracted in Q3. On the upside, though, the Banque de France now expects Q4 GDP growth to end the year at 0.5% (q-o-q), so activity is not projected to extend into recession again. Moreover, our panel’s forecasts for GDP growth, household consumption and manufacturing production have seen modest upgrades this month. Despite both manufacturing orders and retail trade (excluding autos) declining in September, the y-o-y pace of manufacturing output did turn positive in October, rising by 0.7%. Goods consumption fell by 0.2% (m-o-m) in October, though, following a 0.1% fall in September and 0.3% drop in August, on the back of the retrenchment in energy consumption after an unusually cold spring. Worryingly for the GDP outlook, November’s PMI manufacturing and service indices slipped deeper into contractionary territory, at odds with a general improvement in the Euro area as a whole.

The unemployment rate for metropolitan France rose to 10.5% in Q3 after stagnating at 10.4% in Q2. This uptick stemmed mostly from layoffs amongst 50+ year olds. Youth joblessness remained unchanged, though it still holds the highest rate of unemployment, at 24.5%. Our panel’s unemployment forecasts are relatively unchanged this month.


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


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s