adminconstruction activity fell and that industrialists were gloomy.
Consumer borrowing posted the biggest drop last year since 2009 despite ultra-low interest rates as French Finance Minister Pierre Moscovici called for 2013 to mark “a new start for the French economy”.
A preliminary, or “flash” purchasing manager’s index (PMI), a leading indicator of activity, compiled by London-based research firm Markit for France dropped to an indexed 42,7 points in January from 44,6 points in December, to reach its lowest level in 46 months. A value of less than 50 indicates a contraction in business activity and there had been some hope as the indicator suggested late last year that the decline was slowing.
For the entire 17-nation eurozone, the composite PMI, which covers the manufacturing and services sectors, pushed up to 48,2 points from 47,2 points.
“Today’s improvement at the eurozone level comes despite a surprisingly big deterioration in French PMIs,” UniCredit chief eurozone economist Marco Valli noted.
Other releases showed that the amount of French housing loans plummeted by 26,4 percent last year from the level in 2011, when it had already fallen by 4,2 percent, even as interest rates fell to an all-time low.
The average rate for home loans fell in December to 3,22 percent, a study by the CSA Housing Credit Observatory found, and was expected to decline further this month.
The total amount of approved loans nonetheless fell to between US$156 and US$160 billion), according to Michel Mouillart, an economic professor who was lead author for the study. The final figure will be released once it was determined if any of the loans were in fact finalised this year.
Meanwhile, industrialists pointed to rising raw material costs as a key factor for their pessimism.
The French government has forecast economic growth of 0,8 percent this year, but that figure might be revised lower to 0,3 percent.— AFP.
Online Reporter