Tuesday, May 30, 2023

French economy grew 1% in second quarter as COVID curbs eased


© Reuters. FILE PHOTO: People with shopping bags cross the street outside the Galeries Lafayette’s department store during the holiday season in Paris, France, November 29, 2018. REUTERS/Charles Platiau

PARIS (Reuters) – France economy probably grew faster than previously expected in the second quarter thanks to a service sector rebound as coronavirus measures were eased, the central bank said on Wednesday.

The euro zone’s second-biggest economy grew close to 1% in the second quarter from the previous three months, up from a previous estimate of half a percentage point, the central bank said.

The government ended France’s third national lockdown in mid-May and has been gradually relaxing other restrictions since then.

The economy was seen operating at 98% of pre-crisis levels in June and July, up from 96% in May, the central bank said in a note accompanying its monthly survey of 8,500 businesses.

A growing number of companies reported trouble finding enough staff and getting hold of raw materials as the economy re-opened.

The survey found 47% of industrial companies were facing supply-chain problems in June, up from 44% in May while the number hit as high as 80% in the carmaking sector.

Manufacturers’ stocks of raw materials were the lowest on record going back to the early 1980s, while price increases for inputs were the highest since the early 1980s.

Meanwhile, 44% of the companies surveyed said they were having trouble recruiting enough workers in June, up from 37% in May. The number reached as high as 50% in the construction sector and 47% in services.

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