In October, activity in France almost recovered to its pre-crisis level

The Banque de France estimates that activity should return this month “between 99.5% and 100% of its pre-crisis level”.

The ascent is almost complete. In a situation report published on Monday, the Banque de France estimates that in October, the French activity should continue to return to normal: after twenty months of upheavals, at the option of the health crisis, “the activity would be […] almost 100% of the pre-crisis levelThis month, notes the institution.

The indicators are generally green: a “moderate continued improvement in activity“Is scheduled for October, and the Banque de France therefore expects the level of activity to return”between 99.5% and 100% of its pre-crisis level“. Growth should also stand at 2.3% in the third quarter, enough to confirm analysts in their forecast of 6.3% growth for the year 2021.

The capacity utilization rate in industry edged down in September, dragged down by declines in several subsectors, including metallurgy, rubber and plastic products and a significant weakening in autos. Conversely, other sectors have progressed, including the chemical and pharmaceutical industry. In market services, an improvement “very markedIs noted in several sectors, and the construction sector is also experiencing a dynamic period.

These trends should continue in October, according to business leaders interviewed by the institution: construction will progress, as will services, when the industry will be “almost stable or increasing in all sectors“.

Twenty months to return to a pre-crisis situation

The return to normal was long and painful: during the first confinement, the activity had collapsed, before resuming. But this good V-shaped dynamic had been shattered by the resurgence of the epidemic in France. The level of GDP then stagnated for several months, from December 2020 to May 2021, before gradually recovering in favor of the summer. The curve – and the recovery – therefore have the air of a “bird’s wing”.

These new forecasts confirm the optimism displayed by INSEE in its latest publication: “economic activity would recover globally – but without exceeding it […] -, its pre-crisis level by the end of the year“, Predicted the institution last week. A return to normal carried by a “net“Summer rebound, and by a dynamism”mainly driven by household consumption“.

Heavy uncertainties

Clouds are gathering on the horizon, however, experts note. In September, 56% of business leaders in industry surveyed by the Banque de France reported encountering supply difficulties. A proportion rising to 62% in the building industry and up to 81% in the automobile. These increasingly common difficulties “are once again accompanied by increases in the prices of raw materials and finished products», Underlines the report.

Another danger, recruitment difficulties continue to multiply: more than half of the construction and service companies indicated to encounter, in September, a proportion which has risen sharply in recent months. “However, they diminished in catering and temporary work.», Notes the Banque de France. France is not the only country confronted with these phenomena: “this summer, the recovery continued but the pace of growth should ease at the end of the year, against a backdrop of growing supply and recruitment difficulties, and inflationary pressures fueled by commodity prices“, Underlined the national statisticians not long ago.

Reassuringly, the Banque de France does not believe that the inflation felt by households will set in over time. In a post, two economists – Yannick Kalantzis and Youssef Ulghazi – believe that the current price increase “is most certainly temporary, although it can last for several more quarters“. The authors expect a “backlash“Of inflation in 2022, followed by”upward slope»Less marked in 2023, as activity and wages increase. If he’s “very difficultTo predict when the rise will have reached its peak, so it should soon begin to fall below 2%.

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