The French economy recorded the second consecutive quarter of growth in Q4, on the back of an ongoing moderate expansion of private and government spending as well as a rebound in net exports. Meanwhile, investment remained a drag as it shrank in q/q terms for the fourth consecutive quarter. Overall economic growth in 2014 was tepid, at just 0.4% - less than half of the eurozone average. A gentle consumer-driven pick-up is underway, as indicated by higher consumer confidence and positive retail sales.
WEAK COMPETITIVENESS REMAINS AN ISSUE
Exports picked up following a period of subdued performance between mid-2013 and mid-2014. The impact on industrial production is expected to be limited, however, as manufacturer are under pressure to increase efficiency rather than expand due to low external competitiveness. The March PMI survey confirmed further marginal declines in manufacturing in early 2015. This is likely to be followed by positive, albeit modest, growth in H2 on the back of rising external demand and a boost from the weak Euro. A 1.3% increase manufacturing production is forecast for 2015 overall, marking an improvement on previous years but underperformance compared to the eurozone’s 1.6%.
Source : Cushman & Wakefield