Crises continue to make economists dizzy. After a long pandemic tunnel and a war at the gates of Europe, the French economy is struggling to restart. Soaring prices and frictions in global supply chains continue to weigh on the level of activity. In its latest business survey unveiled on Tuesday July 12, the Banque de France forecasts a slight increase in gross domestic product (GDP) growth of 0.25% during the second quarter following a decline between January and February.
Economists have therefore not downgraded their June forecasts when they had ruled out the dark scenario of a recession. “The monthly business survey shows that activity continued to resist in June and that this resistance will continue in July”, declared the director of studies, Olivier Garnier, during a press briefing. In this context of sluggish growth, companies are still struggling to recruit.
Tensions over recruitment at the highest
Recruitment difficulties expressed by companies are at their highest. In the month of June, 58% of managers explained that they had difficulty hiring. This is a high since this question was put up in May 2021. At the time, 37% of companies had expressed this type of difficulty. Last June, construction peaked at 63%, followed by services (61%) and industry (50%). In industry, the percentage has almost doubled since May 2021 (24%) while production has been severely disrupted for months.
In detail, programming and consulting (73%), aeronautics (71%) or even temporary work (70%) are the three sectors most in tension. “The recovery in employment was more marked than anticipated in 2021 and until the start of 2022. There was a strong upturn in activity following a period of hibernation”, recalls Olivier Garnier. “Even before the crisis, many companies were already expressing recruitment difficulties. We see it at the end of both ends, both in very specialized skills and in less qualified positions,” he adds.
Job creation boosted by apprenticeships and work-study programs
Despite this slowdown in French growth, companies continued to create jobs in the first half of 2022. According to the latest INSEE economic update released at the end of June, the French economy created 79,000 jobs. in the first quarter and 37,000 in the second. How to explain these hirings? Asked by The Tribune, Olivier Garnier emphasizes ” there always has a lag between activity and employment in economic cycles. »
This means that companies have continued to recruit despite the deterioration in the economic situation. ” There has been job-rich growth over the past 18 months,” continues the economist, recalling that “Certain phenomena such as work-study and apprenticeship contribute to these good employment figures. » The Banque de France still expects “to a stabilization of employment, or even a slight decline in the months to come”.
Easing supply tensions
The reopening of the world economy in 2021 following long months of confinement had caused major disruptions in global supply chains at the time of the recovery. With the outbreak of the conflict in Ukraine, this phenomenon has amplified everywhere on the planet, putting companies dependent on foreign countries in difficulty to obtain raw materials or electronic parts. After jumping sharply between January and March, tensions over supply continue to decline in the industry, going from 64% in April to 51% in June.
In construction, this proportion fell from 55% in March to 52% in June. Despite these improvements, these difficulties are still far from having returned to their level of May 2021, when the investigation began. In the spring of 2021, 44% of industrialists and 50% of building managers expressed this type of difficulty. With the continuation of the conflict in Ukraine, the return to normal is not for tomorrow.