French consumer spending falls again after rise in June

24th September 2009, Comments 1 comment

French consumer spending on manufactured goods, a key indicator of demand in the economy, fell in August and July after a rise in June, official figures showed on Wednesday.

The INSEE statistics institute said household spending on manufactured products in August was down 1.2% from July when it fell 1.0% after a gain of 1.5% in June.

On a seasonally adjusted basis, household spending in August fell 1.3% compared with a year earlier.

INSEE noted that auto sales, which rose sharply in the first half of the year on the back of a government car-scrapping scheme, were down 3.9% in July and fell another 1.2% in August.

INSEE separately released figures showing business confidence in the industrial sector continued to improve in August and September but still remained low.

Officials said that the September performance, rising six points from July to 85, reflected the overall upturn in the economy but the situation remained fragile and the government would have to continue its support measures.

The industrial business confidence index, with a long-term average of around 100 points, hit a historic low of 68 points in March.

The French economy came out of recession in the second quarter with growth of 0.3% but economists have warned that any recovery will likely be weak because of still rising unemployment.

"What happened this summer may well prefigure what household consumption has to look forward to in the coming months," said the economist Nicolas Bouzou.

A source at the economy ministry added: "Consumption is not likely to take off again noticeably in the coming months."


1 Comment To This Article

  • DJ posted:

    on 24th September 2009, 13:50:51 - Reply

    Holidays in July, and in August Paris is like a ghost town of course people are going to spend less on household goods they are all down south on the coast.