PARIS, March 10 (Reuters) – France’s economy was heading for firm first-quarter growth before last week’s outbreak of the Israel-U.S. conflict with Iran clouded the outlook, the Bank of France said on Tuesday.
The central bank kept its estimate that euro zone’s second-biggest economy will grow 0.2% to 0.3% in the first quarter but said the forecast could be trimmed if the Middle East crisis drives up energy prices or disrupts supply chains.
The monthly business survey underpinning the estimate drew on about 8,500 responses collected between February 25 and March 4. Reports on February activity were little changed, but uncertainty jumped among companies that responded after the February 28 outbreak of war, the bank said.
The survey found industry activity remained above its long-term trend for a ninth month, led by technology sectors, while services exceeded firms’ earlier expectations. Construction also held up despite weak underlying conditions.
Companies reported slightly worse cash-flow positions amid longer client payment delays. Supply-chain pressures increased marginally and selling prices rose at a moderate pace.
Firms expected activity to remain firm in March, though the central bank flagged the renewed uncertainty as a risk to the end of the quarter, with companies citing the possibility of higher energy prices and potential logistics disruptions.
(Reporting by Leigh Thomas. Editing by Mark Potter)
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