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In Q1 2016, households’ purchasing power and corporations’ profit ratio increased again

Quarterly national accounts - Detailed figures Q1 2016

In Q1 2016, gross domestic product (GDP) in volume terms* accelerated: +0.6% after +0.4% at the end of 2015. The previous estimate, published on 30 May 2016, is thereby confirmed.

Household final consumption expenditure recovered markedly at the beginning of 2016 (+1.1% after +0.1%) and total gross fixed capital formation (GFCF) accelerated (+1.4% after +1.0%). All in all, final domestic demand excluding inventory changes contributed +1.0 points to GDP growth (after +0.4 points at the end of 2015). Exports came to a standstill this quarter (0.0% after +0.8%) whereas imports slowed down strongly (+0.8% after +2.8%). Thus, foreign trade balance acted as a drag on GDP growth again (-0.2 points after -0.6 points). Changes in inventories made a negative contribution at the beginning of the year: -0.2 points after +0.6 points at the end of 2015.

GDP and its main components

GDP and its main components

Source: INSEE

Goods and services:
percentage change from previous period,working-day and seasonally adjusted data
Source: INSEE
2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015 2016 (ovhg)
GDP -0.1 0.4 0.4 0.6 1.2 1.1
Imports 0.2 1.8 2.8 0.8 6.4 3.8
Household consumption *expenditure 0.1 0.5 0.1 1.1 1.5 1.5
General government's *consumption expenditure 0.4 0.3 0.5 0.5 1.4 1.1
GFCF 0.2 0.1 1.0 1.4 0.9 2.3
*of which Non-financial corporated and unincorporated enterprises 0.6 0.4 1.6 2.1 2.7 3.7
Households -0.2 -0.1 0.0 0.2 -0.8 0.1
General government -0.2 -0.7 0.7 0.9 -3.9 1.1
Exports 1.6 -0.3 0.8 0.0 6.0 0.8
Contributions :        
Internal demand excluding inventory changes 0.2 0.4 0.4 1.0 1.3 1.5
Inventory changes -0.7 0.7 0.6 -0.2 0.2 0.5
Net foreign trade 0.4 -0.7 -0.6 -0.2 -0.3 -0.9

Households’ purchasing power accelerated

In nominal terms, households’ gross disposable income (GDI) accelerated in Q1 (+0.6% after +0.4%). Indeed, wages received by households accelerated slightly (+0.8% after +0.7%) and taxes on income and wealth decelerated strongly this quarter (+0.3% after +2.5%).

On the other hand, social benefits in cash slowed down (+0.4% after +0.6%) and social contributions paid accelerated (+0.9% after +0.6%), notably due to the increase in the rates of pension contribution on the 1st January.

Household consumption prices were stable as in the previous quarter. As a result, household purchasing power accelerated (+0.6% after +0.4% at the end of 2015). Measured per consumption unit, it also accelerated (+0.5% after +0.3%).

* This growth rate is seasonally and working-day adjusted; volumes are chain-linked previous-year-prices volumes.

Sectoral accounts
percentage change from previous period,working-day and seasonally adjusted data
*NFC: non-financial corporations
Source: INSEE
2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015 2016 (ovhg)
Profit ratio of NFC* (level) 31.1 31.3 31.6 32.1 31.4  
Household purchasing power 0.0 0.7 0.4 0.6 1.6 1.3

In Q1 2016, household consumption increased more quickly than their purchasing power, so that their saving ratio decreased. After an increase of 0.3 points in the previous quarter, at 14.8%, it returned to its average level over the three first quarters of 2015, at 14.4%.

Production, consumption and GFCF: main components
percentage change from previous period,working-day and seasonally adjusted data
Source: INSEE
2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015 2016 (ovhg)
Production of branches -0.1 0.4 0.6 0.7 1.3 1.3
Goods -0.8 0.5 0.5 0.3 1.2 0.7
Manufactured Industry -0.6 0.5 0.7 0.2 1.5 0.8
Construction -0.5 -0.5 0.4 0.5 -2.2 0.5
Market services 0.1 0.5 0.7 1.0 1.8 1.8
Non-market services 0.3 0.3 0.4 0.5 1.0 1.0
Household consumption 0.1 0.5 0.1 1.1 1.5 1.5
Food products 1.1 -0.2 0.3 0.4 1.2 0.8
Energy -2.9 2.5 -2.5 1.7 1.5 0.3
Engineered goods 0.2 0.7 0.1 2.2 2.6 2.7
Services 0.1 0.4 0.3 0.7 1.0 1.2
GFCF 0.2 0.1 1.0 1.4 0.9 2.3
Manufactured goods 1.0 0.2 3.2 4.1 2.1 6.9
Construction -0.5 -0.5 0.3 0.5 -2.2 0.3
Market services 0.8 0.8 0.7 1.0 4.4 2.1
Households’ disposable income and ratios of households’ account
percentage change from previous period,working-day and seasonally adjusted data
*cu: consumption unit
Source: INSEE
2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015 2016 (ovhg)
HDI 0.2 0.6 0.4 0.6 1.4 1.3
Household purchasing power 0.0 0.7 0.4 0.6 1.6 1.3
HDI by cu* (purchasing power) -0.1 0.6 0.3 0.5 1.2 1.0
Adjusted HDI (purchasing power) 0.1 0.7 0.4 0.6 1.6 1.3
Saving rate (level) 14.3 14.5 14.8 14.4 14.5  
Financial saving rate (level) 5.3 5.6 5.8 5.6 5.5  

Non-financial corporations’ profit ratio at its highest level since the crisis of 2008

In Q1 2016, non-financial corporations’ profit ratio increased again, from 31.6% to 32.1%: it reached its highest level since Q4 2008.

The decrease in energy prices bolstered the profit ratio this quarter again, by improving terms of trade. However, productivity gains and real wages increase virtually balanced each other.

Ratios of non-financial corporations’ account
level (in percent), data WDA-SA
Source: INSEE
2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015
Profit share 31.1 31.3 31.6 32.1 31.4
Investment ratio 22.9 22.8 23.0 23.2 22.9
Savings ratio 19.4 19.9 20.1 21.2 19.7
Self-financing ratio 84.5 87.2 87.3 91.5 86.3

In Q1, general government deficit increased anew

In Q1 2016, general government net borrowing rose anew and reached -3.4 points of GDP after -2.8 points in Q4 2015.

Spending bounced back in Q1 (+1.0% after -0.3%), mainly as a backlash of the decrease in the French contribution to the European Union budget the previous quarter. However, operating expenditures decelerated (+0.2% after +0.4%) and the contribution of the debt interests kept on decreasing (-1.4% after -2.5%), because the past price slowdown reduces interests paid on inflation-linked government bonds.

Receipts shrank in Q1 (-0.2% after +1.4%) due to a downturn in corporation tax. The acceleration in production taxes (VAT and TICPE, notably) and that in revenue from social contributions only partly offset it.

Expenditure, receipts and net borrowing of public administrations
level, data WDA-SA
Source: INSEE
2015 Q2 2015 Q3 2015 Q4 2016 Q1 2015
In billions of euros      
Total expenditure 312.1 311.4 310.4 313.6 1243.3
Total receipts 290.3 291.3 295.2 294.6 1165.9
Net lending (+) or borrowing (-) -21.8 -20.1 -15.1 -19.0 -77.3
In % of GDP      
Net lending (+) or borrowing (-) -4.0 -3.7 -2.8 -3.4 -3.5

Informations Rapides

n° 166 - June 24, 2016

Quarterly national accounts - detailed figures - 1st Quarter 2016

Next issue September 23, 2016 08:45 - 2nd Quarter 2016

For further information

  • Historical data are available on the BDM: G1540, G1548.