Published on 2 September 2024
The Banque de France publishes a range of monthly and quarterly economic surveys that provide a snapshot of the French economy in the form of business climate indicators and short-term forecasts.
Our survey of approximately 8,500 companies and establishments was conducted between 22 July and 5 August. As the period covered coincides with the summer holidays and the Paris Olympic and Paralympic Games (the
economic effects of which are only partially captured by the survey), the results and expectations need to be interpreted with caution. According to surveyed business leaders, activity rose in July in market services and construction, and remained little-changed in industry. For August, businesses expect activity to increase in services and industry but to decline in construction. Order books are still deemed weak in almost all industrial sectors, with the notable exception of aeronautics. In the structural works segment of construction, they remain well below pre-Covid levels, due to stagnation in the construction of new builds. Our uncertainty indicator, based on comments from surveyed businesses, has eased slightly, but nonetheless remains high after the strong jump
in our previous survey (conducted between the end of June and start of July), which was linked to the electoral context.
According to industrial firms, selling prices continued to moderate in July against a backdrop of slight growth in raw materials prices. In industry and construction, the proportions of businesses that raised their prices (6% and 3% respectively) were close to pre-Covid July levels.
At the same time, the proportions reporting a drop in their prices (4% and 9% respectively) exceeded pre-Covid levels. In market services, the share of businesses reporting a rise in their prices (8%) is still in the process of normalising.
Recruitment difficulties continued their slow decline, with 33% of businesses mentioning them in July, down from 35% in June.
Based on the survey results, as well as other indicators, we expect GDP to rise significantly in the third quarter of 2024: underlying growth should be around 0.1-0.2%, and the temporary impact of the Paris Olympic and Paralympic Games should add another quarter point. This forecast is subject to both upside risks, linked to possible spillover effects from the Olympic Games, and downside risks stemming from the political uncertainty.
Access the document here:
Updated on 2 September 2024