French GDP expected to rise slightly in the fourth quarter according to the Banque de France

This modest growth expected from October to December would follow the 0,1% increase in gross domestic product (GDP) recorded in the third quarter, the monetary institution stressing however that this first estimate is subject to "a wide margin of uncertainty ".

“We estimate that activity would continue to grow in the fourth quarter, even if at a slower pace,” declared Olivier Garnier, general director of statistics, studies and international affairs at the Banque de France, presenting the new monthly economic survey from the central bank.

In the last quarter, activity would be supported by market services and a slight rebound in the manufacturing industry, after "a small hole" in the summer, he added.

According to some 8.500 business leaders surveyed between October 27 and November 6, activity increased slightly in October in industry, services and building finishing work.

For November, they forecast a continuation of this growth in services, at a moderate pace, while activity would change little in industry and construction.

However, it does not bode well for activity in the coming months, as order books continue to erode in industry and construction, while stocks of finished products are still considered high.

“We cannot expect, in the short to medium term, a rapid acceleration in activity,” commented Mr. Garnier. “We are no longer at all in the phase where production could be driven by the reconstitution of stocks.”

As the employment dynamic is running out of steam, recruitment difficulties are easing: they concerned 44% of companies in October, compared to 49% the previous month.

The Banque de France forecasts growth of 0,9% for 2023 and 2024.

On the price front, “the trend towards normalization (...) is confirmed”, with price increases “close to their pre-Covid level”, according to Mr. Garnier.

In industry, where supply difficulties are stabilizing, business leaders have mentioned a further decline in the prices of raw materials.

Thus, 6% of manufacturers declared having increased their prices in October, compared to 23% a year earlier. Six percent lowered them; the price reductions were even proportionally greater than the increases in the agri-food sector.