Demand still encouraging but activity growing in fits and startsConjoncture in France - October 2015

Vladimir Passeron, Dorian Roucher

Growth remained strong in the advanced economies in Q2 2015. Activity picked up in the United States and the United Kingdom, while forecasts for an upturn in the Eurozone were borne out; French growth was the only disappointment in the zone, grinding to a halt after an upbeat start to the year. However, activity slumped once again in Japan, and the emerging economies continued to slow, affected particularly by the drops in the prices of oil and commodities. The business climate remains positive in the advanced countries. In France in particular, it has improved since the start of the year across virtually all sectors, except construction. The recent drop in industrial output should only be a temporary one, but is still likely to affect the pace of GDP growth in Q3 (+0.2%); this growth should then pick up in Q4 (+0.4%). Over the year as a whole, growth should reach +1.1%. Household consumption should be dynamic in line with their purchasing power, which is likely to pick up sharply over the year as a whole (+1.7% after +1.1%). However, household investment in housing is set to continue its slide and to take its toll on activity as a whole. As for corporate investment, it should accelerate moderately in H2. The upturn in activity is bringing with it a rise in market employment, which has also benefited from the tax credit for encouraging competitiveness and jobs (CICE) and the Responsibility and Solidarity Pact on the one hand, and from subsidised employment contracts on the other : all in all, almost 120,000 jobs should be created in the course of 2015, that should enable the unemployement rate to stabilize.