The business climate is stable, but recruitment problems still weigh

Posted Oct 20, 2022 10:59 AMUpdated Oct 20, 2022 2:48 PM

Despite social unrest, including strikes in the energy sector, the business climate in France remained stable in October, according to figures published Thursday morning by INSEE. The indicator calculated from the opinions of business leaders to summarize this climate stands, just like in September, at 102. Or “slightly above its long-term average”, indicates INSEE.

But this stability is all relative and business leaders are still struggling due to rising energy prices, purchasing power issues and their difficulties in finding staff . In detail, in fact, morale is deteriorating in several sectors, including hotels and restaurants, road transport of goods and retail trade. A depression, however, partly offset by a rebound in industry and construction.

Lack of staff

In the retail trade (excluding automobile trade and repair), the business climate is “deteriorating markedly”, underlines the INSEE. If the problems of household purchasing power naturally weigh on this retail sector, it is a completely different reason that is put forward by the business leaders interviewed: that of recruitment difficulties. “This deterioration is mainly the result of the reduction in balances relating to both past and planned workforces”, sums up INSEE. On the other hand, he adds, retailers are a little more optimistic for the coming months, both in terms of order intentions and expected sales.

This same recruitment problem also affects the services. Now, 62% of business leaders in the sector say they encounter recruitment difficulties. A level unequaled since July 2000 – when INSEE began to take an interest in the question. And, as a probable consequence of this situation, one in three entrepreneurs believes that they cannot develop their activity because of a supply problem.

The situation is particularly deteriorating in the hotel and catering industry and in the road transport of goods. A sign no doubt that these sectors, which are struggling to recruit, must also deal with the repercussions of the problems of household purchasing power and the surge in gasoline prices against the backdrop of the war in Ukraine.

The best in construction and industry

Building contractors and industry consider the situation more favourable. The former, noting that their past activity has improved, expect it to continue over the coming months, even if they believe that it is more difficult to anticipate the future. While now 18% of them are experiencing supply difficulties.

But here again, personnel problems are still at the rendezvous. One in three business leaders say they are unable to increase production in the event of additional orders and to face difficulties due to a lack of personnel.

In industry, after three consecutive months of decline, “the business climate is recovering slightly, thanks in particular to the rebound in the balances of opinion relating to expected production and order books”. A rebound no doubt linked in part to the fact that, for the third month in a row, the proportion of companies declaring supply difficulties has fallen (37%). The share of those who say they are faced with a lack of manpower to increase their production remains stable (23%).

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