BAROMETER. Transport prices fell very slightly in February on a month-on-month basis. Economic uncertainty has entered a new dimension, which has reduced transport demand even further.
Last month, we highlighted the political uncertainty that weighed on economic actors in France. But since then, the arrival of the new Trump administration in the United States has relegated all the Franco-French drama to the background: Will the Prime Minister be overthrown, can France reduce its budget deficit, how to balance our pension system? All these questions were pushed out of the limelight. The uncertainty has now shifted to the international arena, with a trade war launched on all fronts by the United States of Donald Trump. Combined with less dynamic than expected global demand, the trade battle is just beginning, and it will weigh on French exports this year.
Growth forecasts revised downwards
The Ministry of the Economy is sticking to the goal of a reduction of the public deficit to 5.4% of GDP in 2025. However, due to a possible increase in military spending and lower revenue forecasts, the Bank of France has lowered its growth forecast for 2025, predicting a GDP increase of 0.7% this year, against 0.9% anticipated in December. Yet, it was on this more optimistic hypothesis that the government’s budget forecasts were based.
The monetary institution takes note of a slowing down of activity at the end of 2024 and the beginning of 2025, giving little momentum to the French economy. “After the slight downturn in activity observed at the end of last year – a temporary payback after the positive effect of the Olympic Games in the summer of 2024 – GDP is expected to grow at a still moderate rate in the first half of 2025,” explains the Bank of France in its new projections.
Whole parts of the economy are still suffering, such as the construction sector. According to the forecasts of the French Construction Federation (FFB) presented Tuesday, March 11, activity is expected to decline by 2.6% in 2025, after a plunge of 5.5% in 2024. One single piece of good news: The net decline in inflation, limited to 1.3% on average in 2025, should bolster the purchasing power of the French.
A decrease in volumes to be transported
This maximum level of uncertainty weighed on the road transport market. Road transport prices in France fell by 0.5% in February month-on-month, reflecting the gloom of the sector. For several months, carriers have indeed seen a decrease in volumes to be transported.
Source: Upply Freight Index – Route France
The tunnel effect observed in terms of prices would therefore be the result of reciprocal compensation between changes in inflation, diesel and transport demand (...)
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