French central bank sees first quarter growth of 0.2-0.3%

French central bank sees first quarter growth of 0.2-0.3%

France's Economic Growth Outlook

PARIS, Feb 11 (Reuters) - France's growth outlook picked up at the start of the year, with businesses reporting a firmer-than-expected rebound in activity and signalling that momentum should carry into the coming months, the central bank said on Wednesday.

Business Sentiment and Confidence

The euro zone's second-biggest economy is on course to grow 0.2-0.3% this quarter from the previous three months when it expanded 0.2%, the Bank of France estimated.

Sector Performance and Expectations

The central bank gave the forecast in its latest monthly business sentiment survey, which showed companies across industry, services and construction entering February with improved confidence, despite lingering uncertainties linked to global trade tensions.

Challenges and Uncertainties

The Bank of France said industrial output strengthened again in January, extending a months-long run above its long-term trend. The improvement was led by sectors tied to defence and aerospace demand, including electronics and machinery.

Meanwhile, services and construction also advanced, both outpacing what firms had anticipated a month earlier.

Companies expect activity to continue rising in February, with industry set to grow at a solid pace while services and construction point to more measured gains.

Reported uncertainty eased further in services and construction but remained elevated overall and even edged up slightly in industry, reflecting trade tensions.

Cash-flow conditions were still judged slightly weak in manufacturing but improved in services, though with sharp divergences across segments. Supply chain tensions remained contained overall but worsened in aerospace and electronics, while recruitment difficulties increased, particularly in construction.

(Reporting by Leigh Thomas; Editing by Anil D'Silva)