French consumer confidence improves

28th February 2005, Comments 0 comments

PARIS, Feb 28 (AFP) - French consumer confidence in February showed the first month-on-month rise since September last year, resisting the impact of increased unemployment in January but still worryingly low, economists said.

PARIS, Feb 28 (AFP) - French consumer confidence in February showed the first month-on-month rise since September last year, resisting the impact of increased unemployment in January but still worryingly low, economists said.

The national statistics institute INSEE said its composite indicator of consumer confidence came to minus 23 in February from minus 25 in January. Exane BNP Paribas cited consensus expectations for the indicator to remain unchanged.

The indicator represents the balance in percentage points between consumers having experienced, or expecting, a rise in their living standard and those seeing a decline.

The improvement followed a jump in the January jobless rate 10 percent from 9.9 percent a month earlier.

But expectations for unemployment in Monday's survey improved by nine points.

Nicolas Bouzou, an analyst with the financial analysts unit Xerfi, argued that the spectacular results posted by France's blue chip companies in 2004 had boosted hopes, with expectations for the standard of living and for personal finances up three points and two points respectively on the month.

Marc Touati at Natexis Banques Populaires struck a more negative tone and noted that even though the standard of living index rose in February, it was only following a 14-point drop over the past four months.

"If consumer confidence is improving, it's essentially because it was previously at very low levels, from which a slight rebound became almost automatic," Touati said.

"In other words, despite the improvement of two points in February, the confidence of the French remains dangerously low."

Touati argued that in light of that, and after profiting from sales and state help to boost consumption, households are now likely to hold fire and curtail spending until this summer's promotional campaigns.

But at Exane BNP Paribas Emmanuel Ferry maintained that with price cuts and a "dynamic" property market driving consumption, the weak confidence should not be too great a concern for the economy as a whole, as it is based on more "traditional" indicators such as employment and purchasing power.

© AFP

Subject: French News

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