Posted Oct 31, 2022 3:46 PM
While economic activity in France is decelerating, some 3 million businesses in the crafts, trade and liberal professions are worried about the end of the year. This is what emerges from the latest economic note from the Union of Local Businesses (U2P) carried out with 7,675 business leaders.
Only 14% of them anticipate an increase in their activity in the fourth quarter. Inflation, soaring energy bills, slowing activity: just like the rest of the French economy, local businesses are seeing the clouds gather. While INSEE predicts zero growth in the fourth quarter of 2022, they fear a cold snap.
Food shops and hotel-restaurants
According to the U2P, these fears are particularly marked in the local food trade and the hotel and catering industry, two sectors which are still lagging behind in activity by 5.6% compared to its level before the health crisis.
Even if the activity is holding up, growth is marking time. For the fourth consecutive quarter, this slowdown was once again perceptible between July and September 2022. Over the period, the turnover of local businesses increased by 4%, compared to 6.5% during the previous three months. In the current context of high inflation, “global growth is supported by price increases”, underlines the U2P which points to “strong disparities”.
In the food retail and hotel and catering sectors, activity jumped 7.5%, supported by post-Covid catch-up effects. It also remained buoyant in crafting (+5.5%), where it now exceeds its pre-pandemic level. On the other hand, it only increased by 1.5% for the liberal professions.
“Electricity damper” device
Faced with the explosion of their energy bills, more and more local businesses are anticipating a deterioration in their cash flow. As part of its aid plan to help companies get through the energy crisis, the government announced last week for VSEs that did not fall under the tariff shield the establishment of a “damper electricity” from next January.
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