BANQUE DE FRANCE REDUCES ITS GROWTH FORECAST FOR THE THIRD QUARTER
by Leigh Thomas
PARIS (Reuters) – The Banque de France lowered its growth forecast for the third quarter on Monday due to increased supply and recruitment difficulties which are penalizing business activity.
The gross domestic product (GDP) of the second largest economy in the euro area probably grew by only 2.3% during the three months leading to the end of September, estimates the central bank in its monthly report, less than the 2.5 % that she expected last month.
INSEE is due to publish its first estimate of third-quarter GDP growth on October 29.
Economic activity should be “almost 100% of the pre-crisis level” in October, estimates the Banque de France, whose monthly business survey shows that business leaders anticipate an improvement in activity in industry and services and stabilization in construction.
The growing difficulties of supply chains nevertheless penalized the activity of 56% of companies in the industrial sector and 62% of construction companies surveyed, against 51% and 61% respectively in August.
This rate rises to 81% in the automotive sector, strongly affected by the shortage of semiconductors.
In the construction sector, nearly two-thirds of companies say that the shortage of raw materials is a major obstacle to completing projects, while order books remain at a level close to their historical maximum.
While the aid put in place to compensate for partial activity during the COVID-19 pandemic continues to decline, the share of companies indicating recruitment difficulties reached 53%, after 50% in August.
(Report Leigh Thomas, French version Tangi Salaün, edited by Jean-Michel Bélot)