Bank of France Updates Q4 2023 Growth Amid Sector Variations

Summary

  • Despite declines in construction and energy sectors, there’s an increase in the value added in industry, ensuring stability in services, according to the Bank of France.
  • The growth rate measured during Q4-2023 was flat which was previously estimated to be 0.2%.
  • Widespread farmer protests in January negatively impacted the transport and automotive sectors and to some extent the restaurant sector.
  • Despite the crisis, Bank of France doesn’t anticipate a significant impact on growth for the quarter or the year.
  • Business leaders within the industrial sector displayed confidence in their output levels in February, particularly in the food, auto and aero sectors. However, a contraction is projected in rubber, plastics and metal manufacturing.
  • The bank predicts a full-year growth close to 0.9% this year.
  • Amid an overall slowdown, different sectors are showing varied resilience, with services proving more robust than manufacturing.

Assessment of Sectors and Projected Growth

The Bank of France reported a dip in the sectors of construction and energy, which was counterbalanced by an upswing in value addition within the industry while the service sector depicted no significant changes.

The growth rate for Q4-2023 was recalculated to show that the economy remained steady. The bank revised a prior estimate of a 0.2% increase.

Impacts of Widespread Protests

January’s farmer protests, which were extensive throughout France and only ended recently, negatively affected the transport and automotive sectors, and, to a lesser extent, restaurants. However, Francois Villeroy de Galhau, head of the central bank, expressed in an interview with Ouest France that they do not foresee this crisis drastically impacting the quarterly or annual growth.

Industrial Sector Confidence and Predictions

The business leaders surveyed within the industrial sector exuded general optimism regarding their output levels in February, especially those within the food, auto and aero sectors. Conversely, a continued contraction seems imminent for the rubber, plastics and metal manufacturing industries.

Another revision of the Q4-2023 growth rate confirmed an economy that was stagnant at 0.0%, amending the prior prediction of a 0.2% increase.

Anticipated Growth and Variances in Sector Status

Villeroy revealed that the bank anticipates a nearly 0.9% growth rate this year while admitting that different sectors are faring differently amid a general deceleration. Ultimately, the service sector demonstrates greater resilience than manufacturing, he noted.

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