France should post higher growth than Germany in 2019: +1.2% vs. +0.8%. French growth is partly driven by specific factors such as a strong increase in purchasing power (+3% in 2019), a booming construction sector and an impressive job/business creation. We expect +270,000 new jobs in 2019 and business creation to increase by +100,000 units compared to 2018. However, business conditions deteriorated visibly during the last months, as a result of external shocks. The IHS Markit PMI of the European car sector fell to 35 points, indicating a crisis-like context which was driven by a -15% y/y change in the car production in Germany in Q2 2019. As a result, French exporting sectors of intermediate goods to Germany saw a decrease of their order books and higher inventories. Adding to that, French households continued to save, making the private consumption evolution somewhat disappointing despite a strong fiscal impulse. For all those reasons, France should continue to post about +0.2/0.3% q/q growth per quarter until year-end.
