SMEs and very small enterprises (VSEs) are reporting a “clear deterioration” in their cash flow in the third quarter, and their intention to invest is declining, according to a barometer published on Wednesday by Bpifrance and the Rexecode institute. Small business owners also expect a further deterioration in their cash flow in the next three months, according to the results of the survey conducted from August 25 to September 7 among 2,195 companies with 1 to 249 employees.
However, the situation is not yet alarming at this stage given that VSE/SME cash flow is now back to its pre-health crisis level, after having surpassed it.
Decrease in investment intentions
Facing a gloomy economic climate, investment intentions are down two points from the second quarter, yet 53% of companies plan to invest in 2022. But business leaders who believe their investment spending will shrink this year they now outnumber those who think they will rise up. If it falls, the willingness to invest “doesn’t sink” because of that, despite persistent supply difficulties and an anxiety-provoking environment, says Philippe Mutricy, director of research at Bpifrance.
Note the strong growth in the willingness to invest in energy saving and recycling, in relation to the sharp increases in the price of hydrocarbons, more than in new products or services, or in the expansion of production capacity. The modernization or renovation of equipment, however, always tops the list of reasons to invest.
Persistent pricing difficulties
Positive point, the conditions of access to credit “which loosen slightly and continue to be favorable”, either in the short or medium term. A finding shared this Tuesday by the credit mediator of the Banque de France, Frédéric Visnosky, who stressed that if interest rates rose, they remained very clearly below the level of inflation.
However, “the hope of a rebound in 2023 is fading” for companies, in particular with “price difficulties that continue to work on the basis of their economic model and their income statement”, according to the head of research at Bpifrance . Finally, the entrepreneurs who plan to raise their prices do so in 88% due to the increase in non-energy inputs, in 37% due to salary increases and only in 33% due to the high cost of energy.
Source: BFM TV
