A drop of fuel to drive consumption and marginsConjoncture in France - March 2015

Vladimir Passeron, Laurent Clavel, Bertrand Marc et Aurélien Fortin

General outlook : A drop of fuel to drive consumption and margins

In H1 2015, growth should firm up in the advanced economies. It should remain robust in the USA and the United Kingdom and accelerate slightly in the Eurozone: +0.4% per quarter, after +0.3% at the end of 2014. The oil countershock underway since the summer of 2014 is boosting household purchasing power and consumption. Eurozone exports are also benefitting from a substantial fall in the Euro. However, the different European economies do not seem to be benefitting from these positive factors in the same way. In Germany, growth is set to remain sustained as the introduction of a minimum wage at the start of the year stimulates consumption in the short term, and investment in production should be driven by demand prospects. Spain is likely to confirm its dynamism, driven both by consumption and corporate investment. The recovery in Italy, however, should be very slow, after three years of falling activity. Growth in the French economy is likely to be close to the Eurozone average. Like their European neighbours, households are set to consume at a more sustained rate, reaching +1.5% year-on-year by mid-2015, driven by purchasing power. However, the business tendency surveys show a continuing wait-and-see attitude among companies, with their prospects appearing to gain little from these new winds. This being the case, companies are likely to be little inclined to accelerate their investment expenditure which is expected to be flat, despite the significant rise of their margin rate. All in all, GDP should accelerate to +0.4% in Q1 2015, driven by a one-off rebound in energy production after the mild autumn, and then progress in Q2 by 0.3%. Year-on-year, the rise in activity should reach +1.1% by mid-2015, its highest rate since the end of 2011.

Conjoncture in France
Paru le : 02/04/2015