Business climate index shows all-time high

In recent months, business confidence has risen again in France, reaching 70, compared to 64 in the previous quarter and 56 at the beginning of the year on a scale from zero to one hundred. This level is the highest observed since 2005 and the launchInvestigation Every quarter we run it jointly with Duke University. It reflects the acceleration of growth and keeping pace with activity in the wake of the Covid-19 crisis.

This perception is confirmed by the growth expectations of corporate turnover. This is now about 15.2% for 2022. In this context, companies are also planning to increase their investment by 12.2% and 8.6% in their number of employees. In addition, we were informed that according to our survey, today on average 25% of the work time is done remotely (remote work).

The Financial Safety Index also reflects this optimism, coming out at 79 on a scale of zero to one hundred, also exceeding the highest levels observed since the survey began in 2005. And in the absence of a recovery plan. Government support and funding Officials now estimate that the level of optimism will be only two points lower than the current level, at 77.

While at the beginning of the year, more than 50% of companies announced that they are relying on the subsidy scheme, now it is only 20%, and only half of them may face difficulties if the authorities withdraw. This observation appears to justify a short-term exit from government aid. However, targeted monitoring of the most fragile companies appears to be necessary.

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America is more pessimistic

In Europe, the business climate is also on the rise as it reached 76, compared to 70 in the previous quarter and 62 at the beginning of the year, still on a scale of zero to one hundred. This level is also a historical record, well above the level observed before the Covid-19 crisis.

Europe remains particularly driven by Germany, where the business climate reached 76 in the third quarter of 2021. Conversely, in the United Kingdom, which has been hit by several major shortages, the morale of CFOs remains low at most, at 49 .

Across the Atlantic, in the US, we’re seeing a sharp decline in the business climate, dropping to 59 on a scale of zero to one hundred, from 69 in the previous quarter and 68 at the beginning of the year. This is the largest gap in favor of Europe since 2005. This decline may anticipate a slowdown in US activity after a strong recovery at the end of the crisis.

Against this background, US financial officials expect sales growth of about 10.9% and the number of employees of about 5.6%.

It now appears that tensions on supply chains (the “whip effect”) are on the rise. In France, more than three out of four companies that responded to us during the quarter told us they were having this kind of difficulty. In Germany, this number is still nine out of ten, as in the previous quarter.

Similarly, as mentioned in the previous quarter, the increasing demand for raw materials and materials is leading to inflationary pressures which are now evident to the majority of companies. In France, 75% of companies say they are experiencing rising input prices, and in Germany this figure is almost 90%. We continue to believe that these inflationary pressures can spread through the economy through readjustment of selling prices from the end of 2021.

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For more than 20 years, the survey has been measuring the business climate as perceived by the CFOs of companies around the world every quarter. The survey is short (about 5 questions). Collects nearly 1,000 anonymous responses from companies of all sectors and sizes. Uses data from the Duke University Federal Reserve Survey of Richmond and Atlanta for comparison.

I see Here The full results of this survey. Next investigation During January 2022.

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