November 8, 2018 / 9:24 AM / a month ago

UPDATE 1-French business investment to rebound next year - survey

* Manufacturers see 4 pct investment rebound in 2019

* Macron has introduced pro-investment tax measures

* JP Morgan CEO optimistic on French investment (Adds more details and quotes from JPMorgan CEO)

By Leigh Thomas

PARIS, Nov 8 (Reuters) - France is set to enjoy a rebound in business investment next year, manufacturers said in a quarterly survey on Thursday, even though they lowered their outlook for the rest of this year.

Business investment has been one of the main motors of French economic growth this year, as consumer spending has flagged in the face of higher inflation and tax increases earlier in the year.

Manufacturing companies told the INSEE statistics office that they expected to increase investment spending next year by four percent after lowering outlays one percent this year.

President Emmanuel Macron’s pro-business government has sought to boost business investment with more favourable taxation and has plans in the works to allow small firms to take tax write-offs on technology spending.

“Business investment is doing very well in France and even better than our neighbours,” French central bank governor Francois Villeroy de Galhau said on France Info radio.

“There’s been a spectacular change over the past year not only due to tax measures and an overall more favourable environment, but also in the way foreign investors see France,” he added.

The race to attract finance jobs from London after Brexit was a case in point, Villeroy said, adding that Paris was making gains against Frankfurt and other EU financial centres.

JP Morgan Chief Executive Jamie Dimon told Les Echos business newspaper that Macron’s government had done “everything needed” to make Paris attractive for the next 10 years.

“Paris will be one of the big beneficiaries of Brexit whatever happens,” he said.

In INSEE’s last survey, manufacturing firms had expected a four-percent increase this year, but they cut their outlook as they tend to do going into the end of the year - although the latest decrease was more than usual.

In particular, car makers, who ramped up production in the first half of the year before new regulations took effect, slashed investment intentions to a decrease of eight percent from an increase of three percent in the last survey.

Looking ahead to 2019, carmakers told INSEE that they nevertheless expected to hike investment up by eight percent. (Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta)

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