The Bank of France’s Monthly Business Survey estimates that French GDP grew by around 0.1% in the third quarter, supported by market services despite declines in manufacturing and construction. Among approximately 8,500 businesses surveyed, September activity accelerated in market services, increased more weakly than expected in industry and remained broadly stable in construction. Industrial performance varied sharply. Aeronautics remained buoyant and order books were strong in aeronautics and electrical equipment, while weak demand weighed on wood, paper and printing and on rubber, plastics and glass. Services growth was led by business services, accommodation and temporary work, but transportation and food and beverage services contracted. Construction recorded only a marginal increase, reflecting a catch-up in structural work rather than stronger underlying demand. For October, businesses expect industrial production to accelerate, services growth to moderate and construction activity to remain nearly unchanged. Business uncertainty rose markedly in September amid concerns about fuel prices, the economic environment and household purchasing power. Industrial input costs increased faster than selling prices, compressing margins, while cash positions deteriorated in industry and more noticeably in services. Supply difficulties remained broadly stable but were acute in several fast-growing industrial sectors, and 18% of surveyed firms reported recruitment difficulties.
Bank of France estimates 0.1% third quarter GDP growth as services strengthen and cost pressures rise
The Bank of France estimates that GDP grew by around 0.1% in the third quarter, with market services offsetting weakness in manufacturing and construction. September services activity accelerated, while industrial growth disappointed and construction remained broadly stable. Businesses expect stronger industrial output in October, but rising input costs, weaker cash positions and increased uncertainty are pressuring margins.