French business activity strengthens in January, GDP growth projected for Q1

In January, industrial production strengthened, growing faster than forecast and remaining above the long-term average for the eighth consecutive month.

This momentum was primarily driven by capital goods and other industrial sectors, notably computer, electronic, and optical products, machinery, and equipment, benefiting from sales to the defence and aerospace sectors.

The capacity utilisation rate (CUR) stood at 76.6 percent, slightly below its long-term average of 77.1 percent.

Market services activity also picked up, exceeding expectations, with growth in publishing, business services, and food services.

Construction activity saw a stronger-than-forecast rebound, particularly in structural works due to a catch-up effect, and strengthened in finishing works, supported by renovation.

For February, business leaders anticipate a sustained increase in industrial activity, especially in computer, electronic, and optical products, while services and construction expect more moderate growth.

The monthly uncertainty indicator declined in services and construction but remained high, rising slightly in industry due to the uncertain international climate and geopolitical tensions.

Cash positions were slightly below normal in industry but improved in services.

Recruitment difficulties increased across all sectors, affecting 17 percent of businesses overall and 23 percent in construction.

Selling prices rose moderately across the three main sectors.