In France, in Q3 2024, for the first time (statistical series dating back to 1949), non-financial companies invested more (in billions of euros, at constant prices) in "information and communication" than in construction (panel A of our chart). This shift was bound to happen sooner or later, given the trend towards intangible investment (in which "information and communication" is the main item). In particular, this growing weighting goes hand in hand with the increasingly widespread use of electronics and software in today's goods, including in traditional sectors such as the automotive industry.

fxsoriginal

This phenomenon can also be observed elsewhere in Europe, even though the data there are grouped differently and do not provide the same level of detail. Panel B compares investment in new construction excluding housing with investment in intellectual property products (IPP). In Q2 2024, investment in IPP is just below investment in construction in many countries, and even exceeds it in Germany. In Germany, however, while IPP are already dominant, it is mainly because investment in new construction excluding housing is low, and has been lower than in France since 2019, despite a much higher GDP.

In fact, investment in IPP in France is only 6% lower than its German counterpart, compared with a gap of almost 29% in terms of GDP (in real terms). France is also significantly ahead of Italy and Spain in this type of investment (French investment in IPP is almost 2.2 and 3 times higher, respectively, compared with French GDP, in constant euros, which is almost a third higher than Italian GDP and almost twice Spanish GDP).

So much so that the old adage "when the construction sector does well, so does this economy" could now be joined by another: "when (French) tech does well, so does the economy". One thing is certain: investment in software should continue to grow, alongside the increasing number of uses that it is expected to fulfil. It should therefore be less cyclical than investment in construction. In addition, as software depreciates faster than buildings, it will need to be renewed more frequently, which will reinforce the trend towards supporting business investment: a structural determining factor of French growth that is set to remain so in the years ahead.

Download The Full Eco Flash

BNP Paribas is regulated by the FSA for the conduct of its designated investment business in the UK and is a member of the London Stock Exchange. The information and opinions contained in this report have been obtained from public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy any securities or other investment. Information and opinions contained in the report are published for the assistance of recipients, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient, they are subject to change without notice and not intended to provide the sole basis of any evaluation of the instruments discussed herein. Any reference to past performance should not be taken as an indication of future performance. No BNP Paribas Group Company accepts any liability whatsoever for any direct or consequential loss arising from any use of material contained in this report. All estimates and opinions included in this report constitute our judgements as of the date of this report. BNP Paribas and their affiliates ("collectively "BNP Paribas") may make a market in, or may, as principal or agent, buy or sell securities of the issuers mentioned in this report or derivatives thereon. BNP Paribas may have a financial interest in the issuers mentioned in this report, including a long or short position in their securities, and or options, futures or other derivative instruments based thereon. BNP Paribas, including its officers and employees may serve or have served as an officer, director or in an advisory capacity for any issuer mentioned in this report. BNP Paribas may, from time to time, solicit, perform or have performed investment banking, underwriting or other services (including acting as adviser, manager, underwriter or lender) within the last 12 months for any issuer referred to in this report. BNP Paribas, may to the extent permitted by law, have acted upon or used the information contained herein, or the research or analysis on which it was based, before its publication. BNP Paribas may receive or intend to seek compensation for investment banking services in the next three months from an issuer mentioned in this report. Any issuer mentioned in this report may have been provided with sections of this report prior to its publication in order to verify its factual accuracy. This report was produced by a BNP Paribas Group Company. This report is for the use of intended recipients and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without the prior written consent of BNP Paribas. By accepting this document you agree to be bound by the foregoing limitations. Analyst Certification Each analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the analyst's personal views about any and all of the issuers and securities named in this report, and (ii) no part of the analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed herein. United States: This report is being distributed to US persons by BNP Paribas Securities Corp., or by a subsidiary or affiliate of BNP Paribas that is not registered as a US broker-dealer, to US major institutional investors only. BNP Paribas Securities Corp., a subsidiary of BNP Paribas, is a broker-dealer registered with the Securities and Exchange Commission and is a member of the National Association of Securities Dealers, Inc. BNP Paribas Securities Corp. accepts responsibility for the content of a report prepared by another non-US affiliate only when distributed to US persons by BNP Paribas Securities Corp. United Kingdom: This report has been approved for publication in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas London Branch is regulated by the Financial Services Authority ("FSA") for the conduct of its designated investment business in the United Kingdom and is a member of the London Stock Exchange. This report is prepared for professional investors and is not intended for Private Customers in the United Kingdom as defined in FSA rules and should not be passed on to any such persons. Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch, or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions permitted by regulation. BNP Paribas Securities (Japan) Limited, Tokyo Branch, a subsidiary of BNP Paribas, is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association. BNP Paribas Securities (Japan) Limited, Tokyo Branch accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch. Hong Kong: This report is being distributed in Hong Kong by BNP Paribas Hong Kong Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Hong Kong Branch is regulated as a Licensed Bank by the Hong Kong Monetary Authority and is deemed as a Registered Institution by the Securities and Futures Commission for the conduct of Advising on Securities [Regulated Activity Type 4] under the Securities and Futures Ordinance Transitional Arrangements. Singapore: This report is being distributed in Singapore by BNP Paribas Singapore Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Singapore is a licensed bank regulated by the Monetary Authority of Singapore is exempted from holding the required licenses to conduct regulated activities and provide financial advisory services under the Securities and Futures Act and the Financial Advisors Act. © BNP Paribas (2011). All rights reserved.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD tests 1.0700 as Trump declares victory

EUR/USD tests 1.0700 as Trump declares victory

EUR/USD stays under strong bearish pressure and trades near 1.0700, losing over 2% on the day. The US Dollar rallies as Republican nominee Donald Trump becomes the 47th president of the US after winning key swing states, weighing heavily on the pair. 

EUR/USD News
GBP/USD slums toward 1.2850 as Trump win boosts USD

GBP/USD slums toward 1.2850 as Trump win boosts USD

GBP/USD stays on the back foot and drops toward 1.2850 following a short-lasting recovery attempt. The US Dollar outperforms its rivals and doesn't allow the pair to gain traction as Donald Trump completes his political comeback, winning the presidential election.

GBP/USD News
Gold drops below $2,700, US yields surge higher as Trump claims victory

Gold drops below $2,700, US yields surge higher as Trump claims victory

Gold extends it slide and trades at a fresh multi-week low below $2,700 as markets react to Donald Trump's victory in the presidential election. The benchmark 10-year US Treasury bond yield rises more than 4% on the day, forcing XAU/USD to stretch lower.

Gold News
Bitcoin breaks all-time high of $73,777 as Trump takes the lead

Bitcoin breaks all-time high of $73,777 as Trump takes the lead

Bitcoin breaks above its all-time high of $73,777 on Wednesday, buoyed by Donald Trump's poll lead. At the same time, Ethereum is nearing its key resistance level, with a strong close above it, potentially signaling upward momentum. Meanwhile, Ripple finds support around its daily level.

Read more
Trump wins: Tax cuts come with a cost

Trump wins: Tax cuts come with a cost

Donald Trump’s victory will ensure a lower tax environment that should boost sentiment and spending in the near term. However, promised tariffs, immigration controls and higher borrowing costs will increasingly become headwinds through his presidential term.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Majors

Cryptocurrencies

Signatures