Business News and Opinion

Posted on 11/15/2011 at 8:10:09 PM

French growth rose 0.4% in the third quarter, but this recovery is only temporary. The fragile situation of companies will weigh on the end of the year. Frames arrive at the French business district of La Défense

France is already stopped and the recession plane on the French economy, even if the activity was better than expected in third quarter (+0.4%) thanks to buoyant domestic demand for three quarters and exports for the remaining quarter, the impact of inventory is zero, and even if the carry-over at year end will exceed 1%.

Car manufacturers are still very worried. While the order books are empty, inventories continue to rise. Capital goods, metals and chemicals are the most affected by the weak environment. In free fall since the spring, the business climate in services is difficult to stabilize.And it will not work out: the now stagnating employment in France, with net job creation almost nil in the third quarter, with no prospect of improvement in the labor market in the coming weeks, according to economists.

Downward pressure on prices and wages

In this context, the incentives to invest are obviously weak. First, because the conditions of bank loans are becoming more stringent. On the other hand, because the request to industry, both in the Hexagon and abroad, fell in the third quarter and should continue to deteriorate.

• No significant improvement in sight on the employment front
• Air France KLM will increase its capacity by 3.3% this winter
• Net improvement of climate in the industry in January in France
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