The business climate, calculated each month by INSEE among 10,000 business leaders, improved markedly in June. Which bodes well for growth. But, at 78 points, it remains below its long-term average.

The reopening of the stores automatically enabled a resumption of activity which is reflected in the business climate, but INSEE remains very cautious about the impact of this result.

Deconfinement has given balm to the hearts of French business leaders. The business climate, calculated each month by INSEE among 10,000 companies, rose sharply in June, which bodes well for the rest of the year. The index which synthesizes the morale of the bosses gained 18 points in June and is found at 78 points. This is more than the lowest reached during the crisis following the bankruptcy of Lehman Brothers since in March 2009, the index had fallen to only 70 points. But, as INSEE notes, the level of the business climate in June “Remains well below its average of long terme Which is 100 points.

The fact remains that, as in the rest of Europe, companies are more optimistic and this observation is valid in all sectors of activity. In industry, business leaders who are positive about their production prospects are now even more numerous than pessimists. On the other hand, order books, particularly those coming from abroad, still appear to be thinning. In services, the improvement is also notable, even in accommodation and food services. In retail trade, sales forecast by traders are approaching their long-term average.

“Do not overinterpret”

The recovery is therefore launched. But it is still too much to be sure of its magnitude. It is indeed logical that surveys of business leaders rebound after two months of complete hibernation of the economy. “The upturn in the business climate in all sectors is a positive signal for the future”, believes Julien Pouget, head of the economic department at INSEE. But, “ be careful not to overinterpret this indicator ”, he warns.

“As the activity was very weak during the confinement, the personal production prospects of industrialists compared to the recent period are mechanically improving. The variation is necessarily strong but there may be some ambiguity in the response of business leaders, depending on the reference period on which they are based ”. Besides, “Even with poorly filled order books, the simple fact of reopening companies ensures a minimum of short-term activity”, remarks Julien Pouget.

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Philipp Lane, the chief economist of the European Central Bank is also cautious. “As containment measures are lifted, we are seeing some signs of an initial recovery. However, this process should be fairly gradual, as it will take time for consumers and businesses to recover from this shock. Income losses and precautionary savings continue to weigh on consumption ”, he explained on Wednesday. In short, we will have to wait until the start of the school year in September to really judge the extent of the recovery.

“The rebound of the economy should be significant in 2021 (+ 6.5%) but will be insufficient to catch up with the level of GDP before confinement”, warns Julien Manceaux, economist at ING: “ Domestic demand will pick up, but at a slower pace due to widespread business cautiousness about future investments and rising unemployment. On the other hand, net exports should also weigh on growth ”. The International Monetary Fund is counting on a 12.5% ​​drop in French GDP this year, which would make France one of the worst performers in developed countries.