Against this background, the gradual recovery in  domestic demand is expected to continue into the first quarter (Figure 27). However, I would also like to emphasize that the achievement of a two-digit annual growth rate is highly probable in the first quarter of 2010 due to the low base of the same period last year. The weak course of external demand continues to restrain economic activity and employment growth through its impact on industrial production. As a matter of fact, despite the recent partial recovery, indicators such as per capita hours worked across industries and capacity utilization rates of firms oriented towards export markets suggest that resource utilization remains low throughout the economy (Figure 26). The recovery in the labor market that started in the third quarter of 2009 continued into the fourth quarter, albeit at a slower pace. Unemployment declined in seasonally adjusted terms, but still remains elevated (Figure 28). Given that ample slack would continue to be a drag on investment and employment, signs of improvement in employment data during the second half of 2009 are not expected to turn into a robust recovery, suggesting that the unemployment rate will likely remain elevated for an extended period. Therefore, unit labor costs would continue to support disinflation (Figure 29). Overall, recent data releases suggest that the economic recovery has become more robust. Domestic demand would continue to recover, while the weak outlook for global growth would dampen economic activity and employment in the tradable sector for sometime.

Bank of France reports industrial output continued to grow in most sectors in France in January 1997 BANK OF FRANCE, MONTHLY BUSINESS SURVEY, 17/2/97. In January, according to the business leaders surveyed by the Banque de France, industrial output continued to grow in most sectors. Activity was especially buoyant in the intermediate goods and consumer goods sectors. The food processing sector was alone in recording a contraction in activity. The capacity utilization rate improved. Overall demand strengthened further. French products were very competitive on foreign markets and this led to an increase in export orders. Export sales increased in the United Kingdom, Italy and Germany, while demand remained firm in the United States and Asia. On the domestic market, inter-industry demand was strong, even though the orders received came with very short delivery times in most cases. Order books are now near to normal levels. They are still considered to be low in the food-processing and automobile industries, but are deemed to be satisfactory in the capital goods and consumer goods sectors. Inventories of finished products are gradually returning to normal overall, but they still exceed the desired levels in the consumer goods, food-processing and intermediate goods sectors. The outlook for the coming months is distinctly brighter. Activity should increase in all sectors, with marked improvements in the intermediate goods and food-processing sectors. Commodity prices were stable overall, while finished product prices declined slightly. This fall stemmed mainly from substantial price cuts in the automobile industry, while prices generally held up in the other sectors.