26 August 2016

2016- n° 222

In Q2 2016, French GDP levelled off Quarterly national accounts - second estimate - 2nd quarter 2016

In Q2 2016, gross domestic product (GDP) in volume terms* was stable: 0.0% after +0.7% in Q1.

Household consumption expenditure slowed down sharply (0.0% after +1.2%), while total gross fixed capital formation (GFCF) fell back (−0.2% after +1.3%). All in all, final domestic demand (excluding inventory changes) was virtually stable : it contributed to GDP growth for +0.1 points (after +1.0 point in Q1).

Imports slipped dramatically (−2.0% after +0.5%), while exports were almost flat (−0.1% after −0.4%). Thus, foreign trade balance contributed positively to GDP growth (for +0.6 points after −0.2 points). On the contrary, changes in inventories contributed negatively again (for −0.7 points after −0.1 points).

In Q2 2016, production in goods and services slightly decreased (−0.1% after +0.7%). Output in the manufactured goods dropped markedly (−0.9% after +0.1%) primarily due to a slump in refinery output, affected by social movements in May and June. Production in construction also fell back (−0.6% after +0.2%). In market services, it was stable (0.0% after +1.1%) and in energy production, it decelerated (+0.8% after +1.1%).

In Q2 2016, household consumption expenditure stagnated after a dynamic first quarter (0.0% after +1.2%). Expenditure slowed down both on goods (+0.1% after +1.5%) and services (−0.1% after +0.7%).

Consumption of engineered goods was virtually stable (+0.1% after +2.3%): expenditure on housing equipment kept increasing while car purchases and expenses on textile-clothing fell back. Consumption of food products declined significantly (−0.7% after +0.4%). The downturn in household consumption of services was mainly due to a backlash against ticket sales for the Euro 2016 football championship in Q1 and to a decline in spending on accommodation and food and on transport services. However, energy consumption increased at the same pace than in the previous quarter (+1.7%).

Global GFCF were at a standstill in Q2 (−0.2%), after three consecutive quarters of sharp rise (+1.3% in Q1). Investment decreased in construction (−0.5% after +0.3%), as well as in market services (−0.4% after +1.2%). Expenditure on manufactured goods slowed down notably (+0.8% after +3.3%).

In Q2 2016, exports did not grow (−0.1% after −0.4%) despite a rebound in transport equipment, prompted by deliveries of major contracts in the shipbuilding sector. At the same time, imports declined significantly (−2.0% after +0.5%), particularly in raw hydrocarbons and, to a lesser extent, in refined petroleum products. All in all, foreign trade balance contributed positively to activity in Q2: +0.6 GDP points after −0.2 points.

Changes in inventories contributed negatively to GDP growth again: −0.7 points after −0.1 points. They declined mainly in transport equipment and refined petroleum products.

GDP growth stability in Q2 is confirmed. Contributions of GFCF, changes in inventories and foreign trade balance were slightly revised for that quarter.