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Business leaders are very pessimistic about economic activity in the coming months

2024-07-25 16:24:00

Bosses are clearly not in a good mood this summer. The business sentiment index, calculated from responses from business leaders in major market sectors, was 94 points, down 5 points from June. ” Far below” The National Institute of Statistics and Economic Studies detailed its long-term average (100) in a press release.

In the services sector, the indicator fell sharply, from 101 to 95 points, with business leaders surveyed more pessimistic about expected demand. Industry also fell back (99 to 95 points), “Especially since the balance of opinion on foreign orders has fallen”explains INSEE.

Business leaders are demoralized: French economic activity could deteriorate in 2024

The outlook is not optimistic

The decline in the retail sector was also evident (99 to 94 points), with poor evaluations of order intentions and general outlook. The wholesale trade index published bimonthly by INSEE stood at 92 points in July, compared to 95 points in May.

Finally, the construction sector fell less sharply (100 to 99 points), but the indicator is still below its long-term average. Regarding employment conditions, the indicator also deteriorated significantly, falling from 100 to 96 points.

“This deterioration was primarily driven by a decline in the balance of opinion related to the recent and future developments in the services sector workforce.”INSEE underline.

French productivity plummets

Hit by brutal crises (pandemic, war in Ukraine, energy crisis), the French economy’s gross domestic product (GDP) trajectory has suddenly declined over the past two decades.

The focus of concern is the decline in productivity, which will be 3.5% lower in 2023 than in 2019, while productivity growth has accelerated by 0.5% to 0.6% since 2010. According to a recent report by INSEETaking into account the trend before the outbreak of the COVID-19 pandemic, the productivity deficit is even as high as 5.5%.

« This dropout is worrying », declared François Geerolf, professor of economics at Sciences Po Paris gallery. « The government said the results were positive. Employment did improve, but productivity fell. ».