Unlike some of its neighbors, the French economy continues to avoid recession. According to the Banque de France economic report released on Thursday, French activity “remains generally resilient” despite a highly uncertain climate amid inflation, war in Ukraine and energy crisis.
After falling 0.4% in October, GDP growth should return to green in November, at +0.2%. In the fourth quarter as a whole, activity should progress slightly, 0.1% compared to the previous quarter.
Concerns for the coming months
However, the rise in energy prices has not been without its consequences. A quarter of the companies (24%) say they interrupted their activity in November, including 6% “strongly”. And over the next three months, more than a third (35%) of respondents expect to see their business again affected by changes in energy prices and availability, including 42% in the industry. In addition, 55% believe that this situation will have an impact on their margins.
Under these conditions, the forecasts for December are more mixed. In industry, activity should stagnate with significant disparities. It should fall back in the sectors of electronic equipment, rubber and plastic products or even in chemical products, but it should progress in pharmaceuticals, information technology, automobiles, aeronautics and transport. Business leaders in the tertiary sector expect to see a further increase in their activity in December, particularly in accommodation and catering.
Decrease in supply and recruitment difficulties, but production costs still high
If activity is holding up so well, it is also because supply difficulties continue to ease and “are now significantly below spring 2021 levels,” the Banque de France stresses. In November, 41% of industrial business leaders said they were having difficulty obtaining supplies, compared with 43% in October and 48% in September. The same observation in the construction sector where 36% of business leaders still had supply difficulties last month, after 41% in October.
New price increases in November
It should be noted that recruitment difficulties are also fading but remain high (53% of business leaders in November, up from 55% in October), particularly in the service sector (57%, down from 58%), while they fell more in construction (55%, after 60%).
On the other hand, companies continue to face particularly high costs of raw materials and finished goods. As a result, one in five manufacturing companies (21%) said they had increased their selling prices in November. This is also the case for almost half of construction companies (47%) and 17% of service companies.
*8,500 companies or establishments questioned between November 28 and December 5.
Source: BFM TV
