French economy shows slight recovery signs
France's economy showed signs of timid recovery in August with bosses in manufacturing industry reporting a rise in orders but the construction industry remaining depressed. But they still expected investment levels to go down and unemployment continues to rise, if more slowly than at the beginning of the year.
Manufacturing industry bosses were the most optimistic, although expectations remain lower than the long-term average, as they have been since September 2011.
The overall business climate showed a slight improvement, with morale also rising in services and retail and construction being the only exception.
Recent statistics send a mixed message on the French economy:
- GDP: Last week economists reported a 0.5 per cent rise, mirroring an apparent slight upturn in other European countries and leading Finance Minister Pierre Moscovici to claim the economy was on its way to a "lasting" recovery, only to be contradicted by Pierre Gattaz, the leader of the bosses' union, who added that 1.5 per cent growth was necessary for job creation to take off.
- Investment: Most employers told Insee that they had no plans to revive investment, in fact in July they said that investment was likely to fall 6.0 per cent in 2013 with the troubled automobile industry predicting a 25 per cent drop.
- Unemployment: July's figures, announced on Tuesday, continued to rise but, at 0.2 per cent, at a much slower rate than at the beginning of the year, Employment Minister Michel Sapin finding cause for hope in the fact that the number of under-25s seeking work had gone down for the third month running.
- New hires: French social security officials announced an 8.2 per cent rise in new hires in manufacturing after a 8.2 per cent fall in June and 3.6 per cent in commerce, which has seen a 1.6 per cent rise over the last three months.
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