2024-09-20 13:27:30
Of course, as the new school year begins, political turbulence is creating a lot of uncertainty. However, business leaders are not giving in to pessimism. The overall business climate indicator measured by INSEE continues to recover. Already up 3 points in August, it gained another 1 point in September, according to the latest survey by the Institute of Statistics published this Friday.
At 98, it nevertheless remains below its long-term average, which is 100. The indicator is recovering in retail trade (+3 points) but is declining in construction (-1). On the other hand, it remains stable in industry as in services, at 99 and 98 respectively.
The tone in the two sectors is not the same, however. While pointing to better-than-expected past production, manufacturers report a deterioration in their order books. Conversely, service managers believe that demand prospects are improving but are less positive about past activity.
“Mixed return”
The mood varies, however, from one sector to another. In accommodation and catering, the indicator fell by 8 points and fell to 97 after a month of August where activity had been driven by the Paris Olympic Games. Conversely, it climbed by 5 points, to 100, in real estate, a recovery in activity being expected with the easing of interest rates.
INSEE surveyed business leaders between August 28 and September 17, a time when they learned of the appointment to Matignon of Michel Barnier – a rather reassuring personality for them who feared the program of the New Popular Front.
For the moment, these indicators do not seem to be showing a different trajectory from that expected by experts at the end of the year. While the French economy should rebound by 0.4% in the third quarter, driven by the effect of the Olympic Games, the rest looks more delicate.
GDP would fall by 0.1% in the fourth quarter, as a result. The weakening of demand is now the primary concern of SMEs, according to the latest barometer from Bpifrance, Le Lab and Rexecode. In the current climate of uncertainty, some investments and hiring have been frozen. An encouraging point: the INSEE employment climate recovered by 2 points in September, returning to 100.
Faced with the great uncertainty over the fiscal and budgetary policy that will be implemented, the Medef observes a great deal of nervousness on the ground and a wait-and-see attitude. “The start of the school year is mixed for companies. On the positive side: growth has increased slightly thanks to the effect of the Olympic Games and inflation is falling. But there are also negative signals: the number of bankruptcies which are at their highest, the strain on cash flow, the decline in margin rates. Temporary employment is also down, it is a precursor sign of the evolution of employment”, lists Paola Fabiani, vice-president of the employers’ organization.
Vigilance
The return of discussions around a possible contribution from companies to redress public finances, which are in difficulty, arouses vigilance. “It would be a mistake to seek to reduce the public deficit by calling into question the supply-side policy,” insists Paola Fabiani. “It has produced results in terms of economic growth, employment and purchasing power. It has also had a positive effect on tax revenues.”
This Friday on France Inter, Pierre Moscovici, the first president of the Court of Auditors, went in the same direction. “We must not take measures that are hostile to growth,” he argued, stressing that at 1.1% – the forecast of INSEE and the Bank of France for this year – it was “not very high.”
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