News and Press releases
The Viavoice - BPCE barometer survey of French consumer plans - November 2012
After three consecutive months of gloom for France’s consumers, the outlook is brighter as the end of the year approaches: be it in terms of purchasing power, consumption or savings, household forecasts are less pessimistic than they were in October and point to a slight but real improvement in confidence.
Having said that, household sentiment is still a cause for concern, with 42% planning to spend less over the end-of-year festive season.
Less defeatist outlook for purchasing power
Today, a little over one in two French people (52%) expects to see their purchasing power decrease in the next three months. While this remains high, it is still an improvement of 5 points in the space of one month as optimism climbs on the back of the competitiveness measures announced at the start of the month (20 billion for companies). The prospects they offer for the French economy, and for both entrepreneurs and households alike, appear to have put concerns linked to budget austerity on the backburner. What is more, this tentative return of confidence also suggests that the increase in VAT announced for 2014 has yet to breed any real anxiety linked to future purchasing power. Another reason for the uptick is the change in the factors that are causing concern linked to future spending:
- Taxation, for example, has lost some of its punch and was cited by 33% of consumers surveyed (-10 points). The deferral of the increase in VAT along with the help measures for businesses clearly played a part in stemming fears amongst well-off households affected by the tax increases announced in September: in November, only 25% of entrepreneurs (craftsmen, merchants, business leaders) gave taxation as a major concern compared with 53% in October. The same applies to executives and professionals, 44% of whom cited taxation versus 58% last month.
- The price of gas is also less of a worry, falling 3 points to 35%. As things stand, it would seem that no one anticipates an end to the provisional tax cuts set in place at the end of the summer holidays and due to expire at the end of November since the government is currently working on new measures and Total Group has already promised to uphold its contribution and maintain its lower prices
- Fears linked to food prices look to be still in the lead, with 47% of French people believing that spending on food has the hardest impact on their purchasing power (+3): something that has been confirmed by the INSEE National Statistics Institute which has recorded an increase of 2.9% over the last twelve months, i.e. much higher than inflation (1.9%).
Improvement in savings goals and consumption objectives, but limited spending during the end-of-year festive season
The brighter outlook in terms of purchasing power should also have an impact on savings and consumption in France:
- In terms of consumption, 16% of people surveyed said they planned to “spend more money than in recent months” on food and clothing, namely an increase of 4 points amongst which executives and professionals ranked the most highly (22%, +11). 50% of consumers asked said they planned to “spend as much money as in recent months” (+1), and 32% said they wanted to “spend less money” (-5).
- As regards savings, negative sentiment is also down as only 29% of people asked said they planned to “put less money aside” over the next 3 months (-5)
- Lastly, real estate acquisitions plans were up slightly, with 4% (+1) of French people planning to buy a house or flat in the coming months.
These cyclical improvements do, however, mask persistent day-to-day difficulties:
- the number of people who plan to spend less is still higher than those who plan to spend more, including amongst the well-off categories of the population (28% of executives plan to spend less).
- Also noteworthy is the increase in the number of people who declared that they don’t save money (26%, +3), particularly amongst pensioners (41%, +12).
- Lastly, end-of-year household spending is unlikely to catapult in relation to last year. It may even fall as 42% of people asked said they planned to spend less than last year compared with 9% who said they planned to spend more on the “end-of-year festive season”.
This latest survey clearly reflects the complexities of current opinion on the economy: while there looks like being a slight improvement in confidence in the months to come - notably under the impetus of the competitiveness measures - caution is still the word of the day against a difficult backdrop that, come 2013, is expected to affect the public and private sectors and households alike.