The slowdown since the start of last year is of a different nature in France, where it has manifested itself in manufacturing and services, compared to Germany, where it is very much concentrated in the manufacturing sector. Recent data show a somewhat improving picture in France whereas in Germany signs of stabilisation remain tentative Under the hypothesis that concerns about trade relations (US-China, US-Europe) and Brexit will not disappear anytime soon, it seems difficult to expect a significant improvement in the near term. France could however surprise positively on the back of the measures to support the purchasing power of households.
The publication this week of important economic data in France and Germany allows for a comparison of the cyclical environment in both countries. In Germany the indicators of the IFO research institute paint a subdued picture. The overall business climate, across sectors, fell in June and is at its lowest level since November 2014. Pessimism about the outlook has grown, although the assessment of the current situation has improved marginally. The dispersion of the assessment by individual firms –a measure of uncertainty– remains high and has increased slightly.
