In a study by the INSEE, the French national statistics authority, it came out that when questioned in July 2009, the French Industrial sector even worsened its investment predictions for 2009. Equipment and Intermediary goods are more especially touched. with a fall in investment expected to reach – 21 % for the whole year 2009. Only the car-maker industry foresees a possible increase in investments thanks to the French “Clunkers” stimulus.

In the very short video enclosed below (French), the journalist of Le Figaro explains that the main reason for the lack of investment is the impossibility for the companies of gaining access to credit.

What are the consequences of this? Despite a recovery of the industrial production in Q2, and positive readings in the GDP, we can see that professionals remain worried for the future.  All the more since a few months ago, they did not expect to end the year so negatively.

This also means that until there is a real recovery to be seen by Q4, industrials and consumers might remain cautious before the good numbers being shown. In fact, what seems to be acquired is that frugality will be the new world standard going forward. So far, only the Chinese seem to think that we will return to an era of lush spending in Europe and the US.

If recovery there will be, it will be slow and just as painful as the recession.

However, the French Minister of the Economy promised that public investment will take the place of private investment, the question being now for how long…