An eroding financial situation, weakening demand and questions about the fiscal or social measures that will be taken by the Barnier government: the owners of very small and medium-sized businesses (VSEs and SMEs) are navigating in the fog. As a result, many are giving up or postponing their investment or hiring decisions, indicates the quarterly Bpifrance-Rexecode barometer, published Friday November 15.
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A year ago, at the end of 2023, more than half of the business leaders surveyed planned to invest during the year. At the end of 2024, this figure fell to 43%, down almost ten points, in a context of deterioration in cash flow. This is the “the lowest figure for investment projects since 2018, the year the barometer was created, excluding Covid-19”underlines Philippe Mutricy, director of studies at Bpifrance, the public investment bank. Hiring projects are maintained in 46% of cases, postponed or canceled the rest of the time.
This downward revision of projects is linked to the deterioration of the economy: 60% of bosses are worried about a decline in demand, while consumption is still at half mast in France. The lack of certainty regarding budgetary and tax choices, while the Barnier government seeks to make 60 billion euros in budgetary savings in 2025, is strongly felt. “However, uncertainty is the worst thing for a business leader: he needs visibility »recalls Mr. Mutricy. One of their main fears concerns a possible increase in corporation tax, followed by a reduction in social security contribution reductions on low wages, which could translate into an increase in labor costs.
No significant degradation
For their part, mid-sized companies, which do not fall within the scope of Bpifrance's investigation, are also not immune to these concerns. Nearly one in two saw their activity decline over the past year, and expect 2024 turnover to be worse than in 2023, according to the barometer produced by Banque Palatine for the Movement mid-sized companies and published Thursday, November 14.
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Despite these concerns, and despite the difficulties experienced by European industry – particularly in the automotive sector – the economic outlook is not significantly deteriorating for the moment. The Banque de France, which also observes in its monthly economic survey, published Tuesday November 12, that the context is marked by “uncertainty and wait-and-see”estimates that the activity will be “slightly positive” in the last quarter of the year, while the National Institute of Statistics and Economic Studies, for its part, expects zero growth. The outlook for growth of 1.1% for 2024 is maintained.
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