After the good surprise of the 2nd quarter marked by an unexpected growth of 0.5%, the tricolor GDP should evolve “slightly upwards” in the third quarter, according to the latest monthly economic survey of the Banque de France published this Wednesday.
This “slightly positive” growth forecast compared to the previous quarter is based on responses from 8,500 companies surveyed between July 21 and August 4. From this survey it can be deduced that activity continued to advance in July (+0.1%), especially “in industry, services and construction, and the slowdown is less pronounced than expected”.
In detail, growth in market services reached 0.2% last month, a level “beyond expectations” expressed in June by business leaders. On the manufacturing industry side, activity increased slightly (+0.1%) with a “significant increase in production in clothing-textile-footwear, wood-paper-printing, computer, electronic and optical products and the ‘automotive’ . On the contrary, activity in the pharmaceutical, rubber-plastic and chemical branches has fallen.
If activity remained stable in construction in July, after a drop of 1.1% in the second quarter, it increased slightly in construction, mainly in finished work. On the other hand, the order books are beginning to settle in this sector “which is suffering from the sharp drop in sales of new single-family homes,” observes the Banque de France.
Price flexibility confirmed
Thanks to a further decline in supply difficulties in industry (21% of manufacturers surveyed are facing them, up from 57% a year earlier) and construction (12%, up from 48% in mid-2022), the slowdown in inflation is confirmed. In the industry, 9% of business leaders raised their selling prices in July, up from 8% the previous month but 27% a year ago. Taking advantage of falling commodity prices, 6% also lowered their prices, compared to just 3% during the Covid period and 1% in July 2022.
In services, 11% of the companies made the decision to increase their prices in July. This is one point less than in June and 12 points less than a year earlier. On the contrary, 5% lowered them, after 2% the previous month. Finally, the rate increase was decided by 9% of construction business leaders in July (12% in June and 30% in July 2022), while 3% applied reductions (less than 1% by mid-2022 ).
And the trend should continue as the companies expecting further price rises in August are even fewer, be it in industry (4%), services (5%) or construction (4%).
Source: BFM TV
