French business 'still waiting' for promised economic recovery

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Despite broad consensus among economists that France's economy is starting to pick up, many small companies have yet to feel the benefits.

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The recovery is looming, according to French president François Hollande. But in the southern city of Avignon, Norbert Zoppi still awaits signs of an upturn in his business, reports The Financial Times.

Instead, the chief executive of Groupe Berto, which operates one of France’s biggest fleets of commercial trucks, has seen a 5 per cent fall in revenues so far this year.

“We do not feel a recovery at all,” Mr Zoppi declares, in his sunlit office that overlooks a quiet warehouse surrounded by Mediterranean pine trees.

Groupe Berto’s biggest clients, building materials producers and building companies, have suffered several blows since 2008. New housing projects were hit first and then ground to a halt in 2012 when the newly elected Socialist president introduced tax rises and caps on rents.

The family owned company, with about €200m in annual sales and 1,800 employees, is still battling to offset lost contracts with new, often less profitable ones.

Groupe Berto faces the challenges of many small and medium-sized companies that have yet to feel the benefits of cheaper oil prices and a falling euro ripple through their order books.

There is, however, broad consensus among economists that the eurozone’s second-largest economy is emerging from three years of stagnation. Most predict France is likely to beat its 1 per cent growth forecast this year.

A convergence of positive economic factors helps: a depreciating euro boosting exports; record low interest rates keeping down the cost of borrowing and cheaper energy prices improving margins and consumers’ purchasing power.

“The ingredients for a recovery are there,” Gilles Moec, economist at Bank of America Merrill Lynch, says. “The French government is saved by the bell.”

Read more of this report from The Financial Times.

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