France: Consumers reach peak optimism in September – ING

Julien Manceaux, senior economist at ING, notes that in France, consumer confidence continued its robust 2019 catch-up in September, increasing for the ninth month in a row.

Key Quotes

“At 104.1, confidence was close to its post-2008 peak. Fears of unemployment have strongly receded in recent months which – together with the fiscal boost - helped restore faith in consumers' future financial situation. In particular, they were very confident in their future ability to save in September.”

“We think that this signals the end of an era of particularly high savings anxiety, which saw households cutting back on spending during the yellow vest crisis earlier this year. The September confidence survey also showed improvement in important purchase intentions.”

“We clearly see a case for better consumer spending figures, starting this Friday when the August figures will be published. We believe this will confirm our view that private consumption will be stronger in the second half of 2019 (after only 0.2% quarter-on-quarter in the second quarter and 0.4% in the first).”

“The rebound in the retail sector business survey published earlier this week is a sign that improvements on the consumer side are being felt across sectors. That said, the effect of the mediocre first half on private consumption growth will be significant and it is unlikely that the current improvement will push this growth above 1.2% in 2019, after only 0.9% in 2018.”