Key Figures 2016– 2017
In 2015, economic growth strengthened in France averaging an annual 1.2 %. This was prompted by two major factors. Declining oil prices boosted household consumption, the key driver of GDP growth. At the same time, businesses saw a rebound in their profi t margins due to lower interest rates, the depreciation of the Euro against other currencies in addition to the competitiveness and employment tax credit (CICE) scheme.
The first half of 2015 was fairly similar to 2014: capital goods suppliers experienced a relatively stable level of activity with a lacklustre domestic market and continued high demand on export markets. This trend was slowly reversed during the second half of the year. With a view to boosting their competitiveness, industrial manufacturers are seeking ways to enhance productivity gains via automated methods of production, multifunction machines and on-line control equipment. Order intake for machines, robots as well as control and measurements systems improved in subsequent months. Demand has gradually spread to all industrial sectors. This improvement in the production tool was brought about by the additional depreciation scheme for those investing in production. In terms of exports, despite the slowdown in demand from emerging countries, some industrial sectors still enjoyed buoyant demand with regard to packaging machines, cardboard transformation machines and machining lines.
Export orders were spurred on by expansions on the Asian and Indian markets as well as an improved American economy. Nevertheless political uncertainty continued to affect business especially in Russia, the Middle East and Brazil. Economic activity remained sluggish in Europe; however the African market is growing in particular in the Maghreb.
Continued favourable external conditions lends to identical growth in 2016 as that observed in 2015
The one-off support measures implemented, the employment plan along with tax measures for households will stimulate employment growth and maintain household consumption. In spite of this, economic activity will be curbed by high unemployment and an industrial competitiveness that still needs to be improved.
The suppliers of production equipment will see a rise in business activity during the first half of the year on account of more efficient order intake in 2015.
The extension of the additional depreciation scheme to 2017 combined with low interest rates should encourage a recovery in production investment.
In light of all these factors, French GDP growth is projected to reach an annual average of 1.1 % in 2016.
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