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Reforms implemented quickly by new President Emmanuel Macron have already had a positive effect on the French economy. The loosening of France’s notoriously tough labor laws has boosted business confidence. The reforms have also released pent-up demand, driving the economy to some of its best growth in a decade.
Paul Hannon and William Horobin report:
Firms and investors say the election of French President Emmanuel Macron and his first steps to cut red tape and taxes are unleashing pent-up demand. Investment in France by nonfinancial companies rose 4.3% in 2017, the fastest increase in a decade.
At business travel agent Travel Planet in the northern city of Lille, customers were managing their travel expenses from one day to the next before Mr. Macron’s election in May, said Chief Executive Tristan Dessain-Gélinet. After the vote, he said, clients began reserving travel four to five months into the future, a rare level of commitment in the industry. By the end of 2017, revenues at his 100-strong company were up over 50% from 2016 at around €100 million ($123.8 million).
“When people have come close to the abyss, they revise their way of seeing things,” said Mr. Dessain-Gélinet.
The speed of Mr. Macron’s decrees to loosen labor laws turbocharged confidence, companies say. In a booming construction sector, large firms switched from hiring equipment to investing in their own diggers and trucks, said the head of JCB France Françoise Rausch. The French unit of the construction-equipment maker expects to have slightly outpaced growth in its sector of around 19% to 23% in 2017.
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