French industrial investment to rise 7.0 per cent, forecast

There may be some good news for the French economy at last! Industrial investment is set to rise seven per cent in 2015, bosses have told the official statistics institute Insee in a rare piece of good news for President François Hollande's government.

A worker in Renault's Douai plant in 2010 AFP/Philippe HUGUEN

Employers told the authoritative Insee statistics body that they are planning to raise investment in industry by seven per cent over the course of 2015 in a break with the

ambient pessimism that has dogged the French economy for several years.

Finance Minister Michel Sapin leapt on the news to hail a sign of recovery and of the success of the government's economic policy.

The forecast is four points higher than in January when the Insee carried out its last survey.

The most optimistic sector is transport, where bosses have raised their investment forecast by nine points, while agribusiness upped its by four points.

But capital equipment manufacturers struck a dissonant note, lowering their forecast by two points.

Since other industries should invest in their products to expand production, that may undermine the other predictions.

French growth this year was already predicted to make a timid recovery, due to the weakness of the euro, cheap oil and favourable loans.

If the investment really does take place, that could finally mean a reduction in the country's record unemployment levels.