Neither the Banque de France nor INSEE are worried about the consequences of the strikes on growth in the fourth quarter. However, the impacts can be significant in certain sectors, such as commerce and hotels and restaurants in Ile-de-France.
How much will the strike movement cost the French economy? The question does not alarm economists for the moment. “Even if the social movements continued, this would not call into question our forecast of 0.2% GDP growth in the fourth quarter compared to historical precedents”, says Olivier Garnier, director general of statistics and studies at the Banque de France. “Our forecast is robust”, he insists.
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At INSEE, we also tend to put things into perspective. “For macroeconomists, the impact of strikes on activity is not necessarily a big topic”, according to Julien Pouget, head of the conjuncture department at INSEE. “At most, this effect reaches 0.1 to 0.2 point of GDP. This is not likely to derail the economic situation, except that such movements can have more diffuse consequences, in certain sectors or on the overall image of the country ”, he admits.
These rather reassuring words are based on the observation of historical precedents. In November and December 1995, the transport strike cut fourth quarter GDP by 0.2 percentage point. The conflict had lasted 22 days while it is only on its twelfth day this year. At the time, household consumption in transport fell by 10% in December alone and by 4% over the entire last quarter of 1995. So much for the direct effects of this historic conflict.
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Indirect effects were also observed. The French had consumed less and the logistics on which industrial production was based had been disorganized. Household consumption of household equipment had fallen by 6% in December 1995 and purchases of clothing and leather had fallen by 4%. In the spring of 2018, the “pearly” strike by SNCF agents resulted in a loss of GDP of around 0.1 point. At the end of 2007, the ten days of strike action at RATP and SNCF had also cut GDP by 0.1 point. Even the movement of “yellow vests” had only a weak impact on French GDP, of the order of 0.1 point in the fourth quarter of 2018.
While the overall situation does not give rise to serious concerns, Olivier Garnier at the Banque de France stresses that “Sectoral effects can however be marked”. This is still true this year. According to Jacques Creyssel, general delegate of the Federation of Commerce and Distribution (FCD), “The period is difficult for businesses, in particular in the big cities and above all in Paris. In these areas, non-food businesses saw their activity decline by 10% to 15% compared to last year, which had already been affected by the movement of “yellow vests”. However, with one caveat: “ the impact is concentrated on four to five major cities ”, the rest of the country is not experiencing great difficulties, he explains.
It appears that e-commerce is not benefiting much from strikes yet, with the French likely hoping that a lull before the holidays will allow them to do their shopping.