Posted Nov 9, 2022, 8:00 PM
The French economy and businesses are still resisting the crisis, but uncertainties remain high for the end of the year. This is the main lesson of the latest economic note from the Banque de France, published on Wednesday.
Activity should keep its head above water, anticipates the Emission Institute, which estimates, but without giving a figure, that in the fourth quarter, GDP growth “would be slightly positive”, after having reached 0.2% this summer according to INSEE.
Business should continue to grow
“In a difficult economic environment, marked by a succession of shocks, activity continues to resist overall”, notes the central bank which questioned, between October 27 and November 4, 8,500 companies in industry and services. . In fact, business leaders indicate that their activity “increased slightly” in October in these two sectors (and remained stable in construction) and “anticipate a continuation of this trend” in November.
This relative resistance is largely due to an improvement in the situation in terms of supply difficulties (43% say they are dealing with them compared to 48% in September), a deceleration in the prices of finished products and order books which are not deteriorating more, even if they stabilized at a low level. Recruitment difficulties also seem to be easing a little, even if they still affect more than 50% of companies.
The energy crisis will weigh more in the fourth quarter
But corporate cash has deteriorated over the months. And if many French people are already struggling due to rising energy costs, for companies the shock is yet to come, warns the Banque de France which has, for the first time, asked them to assess how they felt the energy situation, both in terms of activity and on their margins.
So far, this impact has been limited. Overall “just over 25% of companies say the energy crisis had an impact (weak or strong) on their business in October”. But they are much more likely to anticipate that this will be the case in November. The proportion of companies concerned about this is in fact between 35 and 40%. Similarly, depending on the sector, between 44 and 66% anticipate that the energy situation will have an impact on their margins.
What weaken their financial situation a little more, without allowing them to increase their prices. Because if in the past they could afford it because of the shortages of products which led many of their customers to accept higher prices without complaining, the situation has changed.
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