With the presentation of the week’s highlights, alert updates, survey of the wider societal context, etc., our economists give a summary and analysis of the available data in order to provide an original sociological and economic monitoring of the Coronavirus health crisis. This survey is then rounded off with various theme-based focus studies published every week.
Socio-economic monitoring from May 22 to 29 – Focus on VSE/SMEs
Are we witnessing a continued decline in business activities or a rebound in our economy? Both undoubtedly... which is a sign of improvement in itself, as is the Franco-German agreement which reduces pressure on Italian rates… but the increase in tensions between the USA and China and the resistance of Northern European countries to the Franco-German agreement give us a foretaste, at this moment in time, of a “post-pandemic world” characterized by confrontation more than cooperation. The French, for their part, seem to be faced with a new dilemma: favor quality of life or comply with health imperatives. Some trade-offs are consensual, others less so...
For SMEs and VSEs, the provision of state-guaranteed loans, partial unemployment benefits, and the deferral of payroll taxes have clearly reduced the pressure on cash flow, even if 7% of SMEs already claim to be facing severe difficulties. But the immediate future is worrying. If it is hoped that business activities will return to their previous levels towards the end of 2020, cash flow positions are expected above all to deteriorate within the next 3 months or so under the pressure of increased working capital requirements and a reduction in state-sponsored assistance at a time when sales have not yet picked up sufficiently. We should bear in mind, however, that SMEs are structurally less vulnerable than in 2009; they should be able to ride out these economic difficulties and embrace the digital transformation (as long as they don’t underestimate the challenges of this transformation) in better shape than feared.
But also the week’s highlights, alert updates, and a survey of the wider societal context here. Socio-economic monitoring from May 22 to 29 – Focus on VSE/SMEs
Socio-economic monitoring from May 15 to 22 – Focus on the sports economy
While it is now easier to appreciate how much the economy has been impacted by the crisis, a clearer idea of the shape of the post-lockdown economic environment is also emerging with, in particular, the trade-offs between real and partial unemployment, the lasting fragility of private entities, and the explosion of public debt.
The sports economy has been hit hard by the lockdown measures triggered by the Covid-19 pandemic. While 64% of French people miss the ability to indulge in outdoor sports, 40% have practiced a sporting activity during the lockdown. Sports associations are potentially more vulnerable than the average of other associations as their resources are derived less from subsidies than from membership fees, a source of funding threatened by the interruption of their activities. The impact is likely to be even more noticeable on companies in the sports sector where lost turnover could reach 30% compared with anticipated growth of 4% to 5% in 2020. In contrast, however, digital sports platforms and e-sporting activities have attracted large numbers of users during the stay-at-home period and could become part of French people's everyday lives. In the medium to long term, the sports economy should benefit from the prevalence of public health issues and the rise of individuals’ concern for the preservation of their health capital.
Discover the details of these analyses along with the week’s highlights, alert updates, and a survey of the wider societal context here: Socio-economic monitoring from May 15 to 22 – Focus on the sports economy
You can also discover or rediscover the complete version of Groupe BPCE’s study on the sports economy published at the end of February and already a reference in this area, by clicking here
Socio-economic monitoring from May 8 to 15 – Focus on local & regional France
It was a short week but, once again, a week rich in economic indicators and the findings of surveys on the state of mind of the French. At a local and regional level, it should be noted that the impact on people’s health and the impact of the loss of economic activity do not overlap on the map. The epidemic is now concentrated in the North-East of France and in the Ile-de-France (Greater Paris) region owing to a number of social factors – density of the population, economic inequalities generated, notably, through a lesser use of teleworking – and geographical proximity to the first clusters of infection. The economic impact of the crisis and the use of State-guaranteed loans (and the credit mediation scheme) are scattered highly unevenly across France, notably due to the specific sectoral characteristics of economic activities.
The measures taken to contain the epidemic are also changing the way the French perceive and interact with their environment: could this explain the new (and lasting?) partiality of French households for the previously neglected real estate market of houses located away from major urban areas?
But also the week’s highlights, alert updates, and survey of the wider societal context… to be discovered ici. Socio-economic monitoring from May 8 to 15 - Focus on local & regional France
Socio-economic monitoring of the period from May 1 to 8 – Focus on savings and consumption
The steep decline in consumption triggered by the lockdown measures in France is estimated at -33% by the INSEE national statistics institute. This drop can be explained by a number of factors, the combination of which will determine the conditions for economic recovery: difficulties in accessing supply (closure of most shops under lockdown), financial difficulties (decline in income due to unemployment, cessation of activity by the self-employed, etc.), and a reduction in the propensity to consume.
At the same time, household savings have risen significantly. Although most of this increase is driven by ‘forced’ savings owing to repressed consumption, it also reflects mounting public uncertainty about the future. In 2020, French savings rates are expected to settle in the 17%-20% range, well above the long-term average. These additional savings will chiefly boost current account balances and, secondarily, holdings in passbook savings accounts but they will also favor equities. According to the AMF stock market regulator, in the space of 5 weeks, a total of 580,000 people – including 150,000 new investors – sought to take advantage of the drop in equity prices by buying shares in companies listed on the SBF 120 stock market index.
But also the week’s highlights, alert updates, and survey of the wider societal context… to be discovered here. Socio-economic monitoring of the period from May 1 to 8 + focus on savings and consumption
Socio-economic monitoring of the period from April 24 to May 1 – Focus on companies
The lockdown has slashed economic activity in France by almost one half (49%) compared to ‘normal’ (INSEE, April 23). While all sectors are experiencing a downturn in activity, the extent of the decline varies considerably:
- Sectors almost at a standstill: automotive, metallurgy, machine and equipment manufacturing, passenger transport, hospitality (accommodation/restaurants), temporary work, and construction.
- Sectors badly affected: textiles, freight transport, information and communication, retail trade.
- Relatively less impacted: pharmaceuticals, chemicals, agriculture, and food.
SMEs and micro-companies: according to the survey carried out by the Confederation of small and medium-sized enterprises (CPME) from April 2 to 12, 60% of micro-companies/SMEs reported a collapse in their activities exceeding 50% in March, and more than half of the managers feared their companies would go bankrupt.
Eighty percent of managers consider themselves well-informed about the French government’s emergency plan and felt their banks were supporting them well; 83% of micro-companies/SMEs have filed requests for short-time working and 28% have already applied for the State-guaranteed loan (21% plan to do so in the near future).
Intermediate-sized enterprises (ISEs): according to the survey conducted by the Movement for Intermediate-Sized Enterprises (METI) on April 17 and 18, the decline in their business activities in April is estimated at -53%. A total of 64% of the ISEs included in the survey have applied for the State-guaranteed loan; 87% have had recourse to short-time working measures and 74% of ISEs anticipate difficulties after the ending of the lockdown period in France on May 11 (chiefly related to sanitary requirements).
But also the week’s highlights, alert updates, and survey of the wider societal context… to be discovered here. Socio-economic monitoring of the period from April 24-May 1 + focus on SMEs
Socio-economic monitoring of the period from April 17 to 24 – Focus on agriculture/food
The lockdown has led to a notable shift in food consumption patterns, a ‘quasi-wartime economy’: a sharp increase in household food consumption, refocusing on basic and/or long-life produce; conversely, festive consumption or consumption ‘for pleasure’ has declined.
Agriculture is one of the few sectors where production activities are continuing with a decline estimated at ‘only’ -10% by INSEE: little short-time working but unmet labor needs and public calls for volunteers. The disruption of supply and distribution chains, however, is undermining the industry’s stability.
Some players will emerge from the crisis stronger than before: networking platforms, farmers’ shops, supermarkets, and cooperatives. The crisis is reinforcing the short-circuit business model, or even on-farm processing and more sustainable consumption patterns with a preference for local produce. Finally, the determination expressed by the French President to “restore French agricultural independence” is a goal shared by 93% of French citizens (Odoxa-Comfluence/Les Echos).
But also the week’s highlights, alert updates, and survey of the wider societal context… to be discovered here. Socio-economic monitoring of the period from April 17-24 + focus on agriculture
Socio-economic monitoring of the period from April 10 to 17 – Focus on residential real estate
With the majority of construction sites having shut down haphazardly since the announcement of the lockdown measures, INSEE estimates that the construction industry has lost 88% of its activity. The fact that construction work will only start up very gradually should depress new building activities overall in 2020. All categories of real-estate and construction professionals are affected, including many self-employed professionals.
According to a survey carried out by BVA for Drimki at the end of March, 15% of participants in the study said they had a real-estate project over the next twelve months, 2% fewer than in February: a notable decline but not a major collapse.
While the estimated impact of the crisis is immediate and massive in terms of volume (transactions and construction), prices should adjust with a certain time lag and with less pronounced fluctuations: in the existing properties segment, transactions are expected to decline by between 25% and 35% in 2020, with prices falling only slightly in the short term (about 2%) but then more markedly in 2021 (between -4% and -7%); in the new-build segment, sales are expected to fall by 40% with a limited recovery in 2021 but with prices holding up unless developers are forced to sell off their stock in a hurry.
But also the week’s highlights, alert updates, and survey of the wider societal context… to be discovered here. Socio-economic monitoring of the period from April 10-17
Socio-economic monitoring for the period from March 28 to April 3 – Focus on companies
Business insolvency is expected to increase in 2020 (+8% according to Euler Hermès) while this was already a reason for concern for SMEs with more than 50 employees before the appearance of the Covid virus. According to INSEE, the effects of the pandemic will impact certain sectors more severely than others: market-related services (non-food retailing, restaurants, transport, etc.), the non-food industry (especially the automotive, aeronautics, capital goods segments, etc.) and construction.
The resilience of most of these sectors has been weakened over the past two years by the economic slowdown in France and by specific, one-off events (the ‘Yellow Vest’ crisis and strike action).
To meet their financing needs, companies have several options; they could draw on the cash deposits they have built up over the past several years (around €450bn in sight deposits at the end of 2019) above and beyond the cash facilities already negotiated (which they are expected to draw down as far as possible) and state-guaranteed loans.
But also the week’s highlights, alert updates, and survey of the wider societal context… to be discovered here. Socio-economic monitoring from March 28 to April 3
Socio-economic monitoring from May 22 to 29 – Focus on VSE/SMEs document pdf - 969.4 kB
Socio-economic monitoring from May 15 to 22 – Focus on the sports economy document pdf - 576.9 kB
Socio-economic monitoring from May 8 to 15 - Focus on local & regional France document pdf - 1.2 MB
Socio-economic monitoring of the period from May 1 to 8 + focus on savings and consumption document pdf - 516.4 kB
Socio-economic monitoring of the period from April 24-May 1 + focus on SMEs document pdf - 413.9 kB
Socio-economic monitoring of the period from April 17-24 + focus on agriculture document pdf - 481.7 kB
Socio-economic monitoring of the period from April 10-17 document pdf - 982.6 kB
The impacts of the Covid-19 crisis on residential real estate – April 9, 2020 document pdf - 1.5 MB
Socio-economic monitoring from March 28 to April 3 document pdf - 886 kB