After exceeding expectations in the second quarter, the French economy stabilized in July-August. This is shown by the Banque de France’s monthly business survey of 8,500 companies, unveiled on Tuesday. “In a still difficult economic environment (tensions on the raw materials markets, supply and recruitment difficulties), activity continues to resist”, underlines the monetary institute.
Driven by a strong upturn in market services – with in particular the dynamism of tourist activity – GDP growth was more dynamic than expected in the second quarter, recalls the Banque de France. This had finally reached 0.5% compared to the previous quarter according to figures published a few days ago by INSEE, while GDP had fallen by 0.2% during the first three months of the year. .
Vigor of human services
Going forward, the Banque de France expects GDP to stabilize in July and August, after the increases in May and June. “With the results we have today and the expectations based on the July acquis, we can count on a slightly positive growth rate” in the third quarter, indicated the Banque de France during a press briefing, according to the AFP.
In detail, the monetary institute is counting on a strong upturn in market services, in particular thanks to the strength of personal services. The balance of opinion on activity in this sector stands at +5 this month, down 3 points from June. In industry, production remained almost stable (-1), while activity contracted in construction (-3, down 6 points over one month), in structural work and in finishing work.
For the month of August, business leaders report more unfavorable prospects in industry and construction. Their forecasts are -7 and -13 respectively in these two sectors, down 6 and 10 points. On the other hand, activity should continue to grow in market services (+4). However, the Banque de France specifies that “these prospects remain shrouded in uncertainty”, particularly on the supply side.
Fallback in price increases
The second message from the monetary institute concerns prices: for the third consecutive month, the proportion of business leaders indicating that they were increasing their selling prices fell back in July, “in connection with tensions deemed to be less strong on the prices of raw materials raw materials,” explains the Banque de France. However, inflation remains at an unusually high level, particularly in market services and construction.
In industry, the rise in the prices of raw materials and finished products is slowing down again. Business leaders also report a slowdown in the rise in quote prices in the building sector (23, -6 points). In market services, on the other hand, they indicate a continued rise in prices (14, +1 point).
Moreover, order books remained full at a relatively stable level in July. In industry, the balance of opinion stands at +15, down 2 points compared to June and remains at +18 in building. With regard to the workforce, they continue to grow, with a particularly sustained pace in market services (5).