FRANCE-ECONOMY * Central bank sees Q4 growth of 0.5 percent * Investment survey sees 2010 slip, 2011 upturn By Leigh Thomas PARIS, Nov 9 (Reuters) - France will escape a sharp slowdown in growth in the second half of the year with the second biggest euro zone economy projected to expand 0.5 percent in the final quarter of 2010, according to Bank of France data on Tuesday. The 1.9 trillion euro economy is picking up momentum thanks to improving activity in industry and the service sector after growth moderated in the third quarter to an estimate of 0.3 percent by the central bank. "This basically is consistent with the idea that what we'll have in the second half of 2010 is a super-soft landing, rather than anything really nasty, which is good news," said Deutsche Bank economist Gilles Moec. "But for 2011 I remain quite prudent because we haven't yet seen the impact of the fiscal consolidation and I don't think we've seen all the impact of the reappreciation of the currency since June," he added. According to a Reuters poll, economists expect official data due on Friday to show that the French economy grew 0.4 percent in the third quarter after expanding 0.7 percent in the second quarter. Economists forecast that the economy is set to grow 1.5 percent this year after a 2.2 percent contraction in 2009, a year of recession across the industrialised world. The French central bank said its monthly industry sentiment index rose to 103 in October from 102 in September, while the indicator for France's dominant service sector remained stable at 96. For the months ahead, the central bank said it expected activity to continue to grow in the services sector, while industrial output was also set to improve. The data follow figures last month that showed business confidence topping its long-term average in October (ID:PISKLE6AT) and consumer morale rising three times faster than expected in September (ID:LDE69P0CC). However, the most recent surveys of purchasing managers suggested that France's factory upturn moderated in October (ID:SLA1ME6GZ) while widespread strikes over pension reform weighed on the dominant services sector (ID:SLA3ME6HJ). INVESTMENT SURVEY TEMPERS OUTLOOK A survey of industrial investment, often a volatile gauge, added a less promising note to the stream of data. The rate of investment was seen falling two percent in 2010, revised down from an increase of five percent in the last poll in July, the INSEE national statistics office said. But investment was seen rebounding next year by nine percent. BNP Paribas economist Dominique Barbet said the downward revision was not alarming insofar as a strong recovery was foreseen in 2011. "But it does show a high level of hesitation and worry among companies," he added. Separately, France's trade deficit narrowed less than expected in September to 4.683 billion euros versus the previous month, according to the customs office. An increase in the number of Airbus shipments, the sale of two satellites and strong demand for French wheat in Africa helped reduce the deficit.

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