French lockdown still reducing economic activity by 35%: INSEE

(C) Reuters. FILE PHOTO: Coronavirus lockdown turns iconic Mont Saint-Michel into ghost fortress

PARIS (Reuters) – A country-wide lockdown in France is still reducing economic activity by 35% more than a month since it was imposed, despite a slight pick-up in the industrial and construction sectors, the INSEE official statistics agency said on Thursday.

Setting those two sectors aside, the estimate suggests that activity has yet to regain any momentum since the lockdown to contain the coronavirus outbreak was imposed in mid-March.

In an updated analysis of the economic impact of the coronavirus outbreak, INSEE said that in the private sector and excluding rents the loss of activity was as much as half of what it would be at normal levels.

With the recovery likely to be gradual after the lockdown is lifted, INSEE said that the impact was likely to be bigger than its previous estimate that each month of lockdown would reduce GDP by three percentage points.

The government has forecast that the euro zone’s second-biggest economy will contract 8% this year, suffering its worst recession since the Second World War.

INSEE said activity had picked up in the industrial and construction sectors after health protocols had been put in place allowing some factories and construction sites to resume work.

The lockdown on non-essential activity is due to run until May 11, although the government has warned that not all businesses will be able to re-open straight away.

Separately, INSEE’s monthly survey showed that business confidence fell in April to hit the lowest level since records began in 1980, falling to 62 points after 94 in March.