PARIS (Reuters) - One week into France’s second coronavirus lockdown this year, the euro zone’s second-biggest economy is holding up much better than the first time, data ranging from traffic congestion to electricity use show.
High-frequency data bear out anecdotal evidence that there are many more people on the streets and businesses open this time, compared to March and April when major French cities were ghost towns.
France’s experience one week in offers an initial glimpse of what the economic fallout will look like from a second lockdown for other European countries that have since or will soon follow.
The French government imposed the latest measures as new coronavirus cases spiralled to record levels, above those seen in the original outbreak that prompted in March first stay-at-home restrictions, which were some of the strictest in Europe.
Location technology company TomTom's TOM2.AS traffic congestion index suggests there was a mad rush to leave Paris shortly before the lockdown took effect last Friday.
Traffic levels then fell to levels not seen since France emerged from the first lockdown in May 11. Although they have since then recovered a tad, they remain well above the depths plumbed in late March. Graphic: Paris traffic congestion -
Likewise, the volume of searches for directions on apps like Apple Maps offer a similar picture, indicating people are moving around at levels seen in late May and early June. Graphic: Apple mobility trends in France -
Meanwhile, electricity consumption is running a bit below the average seen over the last eight years for this time of year, but well above the 20% drop seen in April, according to Reuters calculations based on grid operator RTE’s data.
Graphic: French electricity consumption in 2020 - "We learned from the first lockdown. Now we've got health protocols, equipment, masks, hand sanitizers," a senior finance ministry official said.
“In these conditions, companies are much better prepared to cope with lockdown,” the official said, adding that they were also more organised for working from home.
The French Treasury estimates that the economy is running down about 20% of normal levels, less than the 30% seen during the first lockdown.
Therefore, it expects gross domestic product to contract 2.5% in the quarter, leaving the economy to shrink an unprecedented 11% for the whole of 2020, Treasury’s chief economist Agnes Benassy-Quere said this week.
With many non-essential shops, cafes, restaurants and hotels closed, the retail sector is bearing the brunt of the economic impact while factories and building sites are largely spared this time.
Restrictions on construction work during the first lockdown explained a large part of the 13.7% plunge in GDP seen during the second quarter, economists say.
Although the overall impact of the current lockdown is expected to be less dire, many small companies only survived the first one thanks to more than 120 billion euros (108.3 billion pounds)in state-guaranteed loans from their banks, more than in any other European country.
That leaves them facing the new restrictions with strained balance sheets, which Bank of France chief economist Olivier Garnier said leave a longer-lasting impact on the economy even if initially shallower than under the first lockdown.
“From the point of view of companies’ financial situations, the impact risks being more about solvency than liquidity,” Garnier told an online small business conference on Thursday.
Reporting by Leigh Thomas; editing by Emelia Sithole-Matarise
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