The French economy saw inflation fall markedly in June. Consumer prices increased 4.5% year on year after having risen by 5.1% in May and 5/9% in April. June was the third consecutive month to see a reduction in inflation, which dropped to less than 5% for the first time since April 2022. On a month by month basis, prices increased by 0.2% in June after having fall by 0.1% in May, according to figures from French national statistics institute INSEE. On the other hand, food prices, fresh products excluded, fell for the third consecutive month.
The fall in consumer prices is good news for households but signifies that the economy is slowing after having overheated during the immediate post-Covid period. "The headline HCOB Flash France Composite PMI Output Index fell from 51.2 in May to 47.3 in June, below the critical 50.0 threshold that separates growth from contraction for the first time since January and thereby ending a fourth-month sequence of expansion in France’s private sector economy," said S&P Global in a news release on 23 June. In the Economic Outlook it published in June, INSEE estimated that French growth would slow from 2.5% in 2022 to 0.6% in 2023. Household consumption is falling and investment by companies and public bodies is down.
It is a good bet, therefore, that road freight volumes will not increase in the second half.
In this situation, French road freight rates dipped 0.4% compared to the previous month. For some months now, prices have varied between -1% and +1%. We are a long way from the variations of more than 2% we saw in 2022, as diesel fuel prices fluctuated. This indicates that prices are likely to stabilise in future.
Source: Upply Freight Index – Road France
Year on year, road freight rates registered a fall of 1.6% in June, whereas the national road transport committee's long-haul semi-trailer truck index showed a 7.8% reduction (...)