Most of the macroeconomic figures for Q3 2020 are now available. Like the Q2 figures, they track an unprecedented sequence of events in which a large part of the economy came to a standstill before picking up again. The rebound was strong: French GDP increased by +18.2% in Q3 compared to Q2, bringing year-on-year change to –4.3% (against –18.9% the previous quarter).

This large-scale turnaround ultimately took place over a relatively short period of time: available monthly data suggest that most of the rebound happened in May and June, well before the start of Q3. It was helped by an economic policy that aimed to preserve the productive fabric and household income as far as possible, by increasing public debt. A Focus in this issue of Economic Outlook shows to what extent the short-time working scheme was able to ensure that employment fell much less than the volume of paid work since last March.

However, the second wave of the epidemic and the second lockdown of the population have thwarted this rebound and changed the timescale of the crisis. In addition to the contraction in GDP that is already expected for Q4, it is now fairly probable that the health and economic situations will continue to be linked together for at least the first half of 2021.

The expectations of economic stakeholders are therefore being adapted accordingly. The prospect of a vaccine, if it materialises, suggests that the end of the health crisis may be on the horizon.

As at the time of the first lockdown in March, this issue of Economic Outlook focuses on an assessment of the current economic situation (especially GDP and household consumption levels), using different types of data, and “high-frequency” data in particular for the beginning of November. Once again, the trends observed were both sudden and on a large scale, although the contraction appeared to be less severe than in March.

Astonishment appears to have given way to adaptation and learning. Regarding production, with remote working now in place, or, when this is not possible, health protocol implementation which has now become fairly routine, and the reopening of schools, these measures will ensure less of a contraction in economic activity. In November, it is expected to be about 1% below its pre-crisis level (against about 30% in April), an estimate close to that calculated recently by the Banque de France. Construction and industry in particular should see some much smaller losses than in April. Although health protection measures ensure a certain continuity in production, they nevertheless do have an effect: almost half of the businesses questioned for our business tendency surveys considered that these measures reduce their productivity.

Regarding household consumption, the decline is likely to be a little more pronounced than the decline in GDP, of the order of –15% compared to the pre-crisis level, or half of the fall recorded during the first lockdown. The range of businesses remaining open is a little larger than in spring; distance selling and home delivery services have grown substantially, but they are still far from making up for the losses of consumption associated with the closure of “non-essential” activities and businesses.

A study of the aggregated amounts of CB bank card transactions, available on a daily basis, shows several differences compared to the first lockdown, thus confirming that consumer behaviour has adapted. Online sales soared from the very start of the second lockdown, whereas they were weak at the end of March. Precautionary purchases (food, fuel) were not as huge as during the days leading up to the first lockdown.

According to the national accounting data for Q3 2020, the year-on-year change in GDP in France (–4.3%) is comparable to that of Germany (–4.2%) and slightly more favourable than that of Italy (–4.7%). Losses in activity compared to Q3 2019 are almost twice as high in Spain (–8.7%), which has been heavily penalised, especially by the weight of tourism in its economy, and in the United Kingdom (–9.6%), affected in addition by the resurgence of uncertainty surrounding Brexit.

High-frequency data available for the different countries (mainly search engine queries and statistics on travel) reflect the tightening of health measures in the face of the second wave of the epidemic across Europe. At the present stage, the effects of these measures introduced at the beginning of November appear to be more strongly felt in France than in most of the neighbouring countries, whether in the use of public transport, for example, or numbers going to non-food retail stores, places of recreation or restaurants.

There is still a great deal of uncertainty surrounding the end of the year, dependent on the evolution of the epidemic. For this reason, three scenarios are analysed in this issue of Economic Outlook. In the most favourable case, activity in December looks set to recover its October level, i.e. 4% below its pre-crisis level. In the least favourable scenario, activity in December is likely to remain at its estimated level for November, i.e. 13% below its pre-crisis level. Finally, in an intermediate scenario (15 days of lockdown similar to November then 15 days with the easing of some restrictions), activity in December is expected to be about 8% below its pre-crisis level.

In Q4, quarterly change in GDP is therefore expected to be between –2½ and –6%, depending on the scenario (with –4½% for the median scenario). Annual change in GDP in 2020 is likely to be around –9 to –10%.