Posted Jul 12, 2022, 9:05 PM
In the unprecedented and uncertain context that is hitting the economy, the economic report produced by the Banque de France with 8,500 business leaders, published on Tuesday, brings two reassuring news. First, following making progress in April and especially in May activity held up well in June.
Therefore, “I confirm my estimate of a 0.25% increase in GDP in the second quarter,” said Olivier Garnier, chief economist of the monetary institute. A performance in line with the “central scenario” unveiled on June 21, namely an increase in GDP of 2.3% in France this year, close to that of Bercy (2.5%).
The second message from the central bank concerns prices: for the second consecutive month, the share of business leaders who raised their selling prices fell in June. However, it remains at an unusually high level: half of the bosses say they have pushed through increases in construction, 36% in industry (more in chemicals, the wood or plastic rubber industry) and 25% in Services. “In normal times, less than 5% of managers say they raise their prices,” recalled Olivier Garnier.
The industry as a whole is certainly running at 79% of its production capacity with even a utilization rate above the historical average in most sectors. But 59% of companies are still facing supply difficulties (52% in construction). While they have dissipated in clothing and footwear, tensions remain high in the automobile and chemicals sectors. In July, the outlook for these two sectors is also deteriorating, unlike most other industrial branches.
The survey also shows that labor shortages are getting worse month by month. In June, 58% of companies surveyed were concerned, an increase of three points over one month. This is, according to the Banque de France, “the highest level ever reached” since the spring of 2021, when the question began to be asked. At the time, only 37% of managers were faced with this problem.
Today, all sectors are affected. But recruitment difficulties are progressing more in services (+5 points) than in industry or construction, even reaching records in consulting and programming, temporary work or cleaning (63%). Between the lack of arms and the return of the Covid, activity in services should only progress “moderately” in July. “The recovery has been rich in job creation”, analyzes Olivier Garnier.
Added to this are the persistent problems of training and matching profiles to demand. “We must deal with this problem from the start of the school year in September”, hammered the Minister of Economy and Finance, Bruno Le Maire, at the Economic Meetings of Aix-en-Provence which were held from Friday to Sunday last. After purchasing power, the labor shortage is the second priority that the government intends to tackle.