French Economic Growth Slows Sharply as Weather Hurts Output
(Bloomberg) -- France’s economy saw growth slow sharply in the first quarter as winter storms ripped through the country, hitting factory production.
Gross domestic product expanded 0.3 percent, the weakest in more than a year and less than half the 0.7 percent pace recorded in the previous three months. It’s also slightly below the 0.4 percent estimate of economists surveyed by Bloomberg.
The slowdown comes after a revival in economic fortunes in 2017, when the country achieved its best year of growth in six years. After the heavy snows in February and March, economic disruption is continuing into this quarter as rail workers stage strikes to protest President Emmanuel Macron’s plans to reform the industry.
Manufacturing production fell 1.1 percent in the three months, the first decline in seven quarters.
While weather and strikes may have hit the French economy, there’s been a broad loss of economic momentum across countries and sectors in the euro area. Many indicators of activity have slipped from their 2017 highs, and the specter of a possible trade war between the U.S. and China, the world’s two biggest economies, is casting a shadow over the outlook.
What Our Economists Say“How much momentum is the French economy carrying? That question has become more difficult to answer. Bad weather in 1Q and strikes in 2Q have muddied the water. We expect the economy to emerge from this soft patch and the expansion to continue uninterrupted.”
--Jamie Murray and David Powell, Bloomberg Economics
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The strengthening euro -- up 11 percent against the dollar in the past year -- is another possible restraint on growth. L’Oreal SA earlier this month attributed a first-quarter drop in revenue to exchange-rate effects, despite its fastest sales growth in eight years.
Still, there are some encouraging signs that growth can pick up afresh in the second quarter. The purchasing managers’ index for French manufacturing and services rose in April, IHS Markit said earlier this week. New orders increased for a 22nd month.
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