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Edition May 2, 2018 - Crédit Agricole S.A.
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  • Edition May 2, 2018

    France – 2018-2019 scenario: Robust growth in 2018-2019 despite increased recruitment difficulties

    Q1 GDP showed slowing growth. This was expected and was justified by one-off factors; this does not suggest, however, that the French economy has begun a cyclical downswing. Over 2018 as a whole, the pace of growth is forecast to remain robust. France is experiencing increased recruitment difficulties that reveal a level of activity that it now nearing its potential, and a problem of labour suitability.

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  • Content:

    - Growth decelerates in Q1
    - Towards an uneven quarterly profile in 2018
    - Sharp rise in recruitment difficulties: where do we stand in the cycle?
    - How to interpret the marked acceleration in recruitment difficulties in France?
    - Wage pressures are still moderate, however
    - After accelerating in 2017, growth looks set to settle down to a robust pace in 2018-2019, although against a more uncertain international environment

  • Extract:

    How can this convergence of marked recruitment difficulties and a high unemploy¬ment rate be explained? Since the 2008 crisis, the unemployment rate among the long-term unemployed has been rising (an annualised 4.0% of the workforce in 2017, compared with 2.5% in 2008). The skills levels of the long-term unemployed, which have been unused for a long time, had almost certainly tended to deteriorate in an environment of rapid technological change. Second, the existence of a population group with few qualifications, who are less employable, may also have contributed to increasing the structural nature of unemployment. In France, the unemployment rate among people aged 25-64 with no qualifications is 16% compared with 10% in Germany: a six-point difference. Conversely, in the category of those with higher education qualifications, the gap is only three points (2% in Germany, 5% in France).

    To the low employability of a part of the workforce should also be added a number of uniquely French features, and in particular, the historically less flexible labour market than in other adjacent countries such as Germany.

  • France: GDP and business climate

    The fall in Insee's composite PMI and business climate index since the start of the year should therefore not be read as an early sign of a cyclical downswing but rather as adapting expectations to reality. The reality is that of an activity cycle which, after seeing a period of acceleration, is now in an expansion phase.

    France: GDP and business climate
  • Associative topics : Economics | France


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