French consumers in gloomy mood

07 January 2010

PARIS: Consumer confidence levels declined in France for the first time in five months, directly impacting on the willingness of shoppers to make major purchases.

According to INSEE, the national statistics office, its index of popular sentiment fell to a score –31 points in December last year, down by a point since November.

Similarly, the barometer assessing respondents' perceptions of their future financial situation slipped to –10 points, off by two points when measured against the previous month.

Participants were also less willing to buy “big ticket” items in December, with the indicator in this area standing at –20 points, down by one point, while many contributors predicted that prices would rise in the future.

Bruno Cavalier, an economist at Oddo et Cie, the private bank, said: "From the point of view of households and consumers, the economy is still very fragile."

"The improvements we've seen in some sectors like manufacturing or in the stock market rally last year are one thing but the economy that people experience directly is quite another."

It is estimated that total consumption in France contracted by 0.1% in November 2009, despite the fact many motorists took advantage of the government's “cash for clunkers” during the offer's final month.

More positively, the economy expanded by 0.3% in the third quarter, and it is expected to have grown by a similar margin during the fourth quarter.

Data sourced from RTT News/Reuters; additional content by Warc staff