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The BPCE - Viavoice barometer survey of projects planned by the French - February 2012

Clear improvement in household outlook for the next three months.

Things are looking up financially for the French over the next three months according to our indicators. Concerns over purchasing power are receding, and fewer households predict their expenses or savings falling in the future, a sign of improvement in their short-term prospects.

Of course households still foresee great hardship in this period of economic stagnation. There are still very few (10%) who predict their purchasing power will improve against a backdrop of flat salaries and price increases, particularly for gas. They also do not see the political debate as offering concrete answers to the growing issue of cost of living, which nevertheless should be influential in the next elections. However, such improvement is a good omen, and could be a decisive factor if it spreads in the coming months, while all of the economic players, reassured by stabilizing markets, are now waiting for the recovery of the "real economy", which primarily depends on household morale and consumption.

A significant drop in pessimism over purchasing power, expenses and savings

Perceptions in terms of purchasing power over the months to come are becoming less pessimistic: while in January a majority of French people (54%) still said their purchasing power would fall, now only 42% think so, a 12-point drop in one month.

In addition, such improvement impacts saving and spending intentions:

  • just 34% of households predict they will spend less money in the next three months, a six-point decrease. Furthermore, 56% (+8) say they will spend as much money and 8% (-2) will spend more, showing that falling pessimism hasn't translated into rising optimism.
  • Similarly, 26% believe they will put less money aside, another six-point decrease, while 10% (+2) will put aside more.
  • Finally, car purchase intentions improved slightly, with 8% (+1) of respondents predicting they will purchase a new vehicle or change their current one.

As a result, though not decidedly upbeat, the French now seem less resigned than they have in recent months, which have been marked since August 2011 by an anxiety-inducing debt crisis that, by destabilizing the markets, hindered any recovery and therefore any perceptible improvement in purchasing power.

Gas has become a major purchasing power concern, ranking ahead of food

Though the current environment is rather beneficial for household outlook in the macroeconomic sense, it is no less burdened by major concerns, with the price of gas coming first. In fact, for the first time since May 2011, this has become the major worry in terms of purchasing power, ranking ahead of food. Above all, it is the only essential budget item, aside from housing, that has not gone down in terms of ability to provoke anxiety: 43% of respondents count gas as one of the budget items that worry them the most, compared to 41% (-3) for food, 31% (-4) for electricity and 16% (+4) for housing.

This situation is problematic because, on the one hand, it places a burden on household budgets but, most of all, it creates a feeling of resignation before price spikes that are viewed as inevitable, as long as the price of crude overshadows national political debates, in particular with the recent Iranian boycott of French and UK oil companies.

The French do not view the political debate as offering persuasive answers to the problem of purchasing power

 Two months away from the first round of the presidential election, the subject of purchasing power does not appear to be a differentiating issue for the various candidates, as it was in 2007. Certainly, this question has become particularly loaded due to the crisis, with 85% of the French considering it to be a significant concern (with 41% considering it "very significant"). However, only 13% say they have heard "convincing proposals" on purchasing power from any presidential candidates, and 83% claim they have heard nothing persuasive. This point of view is widespread in all population categories. Nearly five years after Nicolas Sarkozy's "work more to earn more" slogan drew many voters, the issue of improving purchasing power now appears to have lost its credibility, and remains a problem without a real solution for the vast majority of French citizens.