An eroding financial situation, weakened demand and doubts about the fiscal or social measures that the Barnier government will take: the owners of very small and medium-sized enterprises (VSE and SMEs) navigate in a fog. As a result, many are resigning or postponing their investment or hiring decisions, indicates the quarterly barometer of Bpifrance-Rexecode, published on Friday, November 15.
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%, almost ten points less, in a context of deteriorating cash flow. This is the “the lowest number of investment projects since 2018, the year the barometer was created, excluding Covid-19”underlines Philippe Mutricy, director of research at Bpifrance, the public investment bank. Contracting projects are maintained in 46% of cases, postponed or canceled the rest of the time.
This downward revision of the projects is related to the deterioration of the economy: 60% of businessmen are worried about a decrease in demand, while consumption remains at mid-level in France. The lack of certainty over budgetary and fiscal options is strongly felt, as Barnier’s government seeks to save €60 billion in budget in 2025. “However, uncertainty is the worst thing for a business leader: you need visibility »Mutricy remembers. One of their main fears concerns a possible increase in corporate tax, followed by a reduction in social security contributions for low wages, which could translate into an increase in labor costs.
No significant degradation
For their part, medium-sized companies, which do not fall within the scope of Bpifrance’s research, are not immune to these concerns either. Almost one in two saw their activity decline last year and expect turnover in 2024 to be worse than in 2023, according to the barometer drawn up by the Banque Palatine for the Medium Enterprise Movement and published on Thursday, November 14. .
Despite these concerns and the difficulties experienced by European industry – particularly in the automotive sector – the economic outlook is not deteriorating significantly at the moment. The Banque de France, which also observes in its monthly economic study, published on 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 growth outlook of 1.1% for 2024 is maintained.
