The 2013/01/31 at 08:15
French company heads are serene about their own businesses, but worried about France. This is the outcome of the latest ViaVoice/CCI France barometer on the confidence of French company heads.
Indeed, the survey reveals that the general feeling is extremely pessimistic. In response to the question, “in coming months, are you completely confident, fairly confident, fairly unconfident, or not at all confident about the French economy?”, 77 % answered that they were “fairly unconfident” (46%) or “not at all confident” (31%) as opposed to only 2 % “confident” and 18 % “fairly confident”.
These results confirm the significant drop in confidence observed in June 2012 when 75 % of employers declared themselves not confident, compared to 24 % confident, despite a climb in optimism in February 2012 when 38 % of company heads were confident about the general economic situation compared to 62 % sceptical.
Looking at the details of the results, it can be noted that employment is the greatest source of doubt for company heads, as 91 % of them do not believe in a recovery in coming months, compared to only 8 % voicing optimism. This is the worst result on record since March 2009, the date when this index was launched, when 11 % believed in a recovery of employment. But the most worrying element is that this figure has fallen despite 46 % of bosses, in June 2011, once again placing hopes in a recovery of employment.
The same can be observed for confidence in economic growth, down from 52 % optimistic in June 2011 to 14 % according to the survey’s latest results. Finally, only the State’s control over deficit has neither inspired a drop or rise in confidence, with only 14 % expressing confidence, a figure within the average in recent months.
Optimism in personal circumstances
Given the endurance of the crisis, the general climate, and the political changes in recent months, it’s not surprising to see the economic world showing mistrust and a lack of optimism regarding the future.
Nevertheless, this pessimism only applies for the general economic situation. When questions concern the businesses themselves, company heads do not respond in the same way. Indeed, in reply to the question, “in coming months, are you completely confident, fairly confident, fairly unconfident, or not at all confident about your company?”, a large majority are optimistic. 68% of company heads survey declare themselves confident about their business as opposed to only 30 % pessimistic. Confidence has thus leapt up by 9 points since the last index, while pessimism has dropped by 10 points.
This is the heart of the paradox. For if the individual expressions of optimism were added up, we would find general optimism for the country’s future. And yet the survey shows the opposite.
According to the ViaVoice analysis, this disparity can be explained by a critical assessment of the government’s attitude to the preoccupations of businesses, considered to evolve “in the wrong direction” according to 43 % of company heads, while 42 % of them believe that it has “not evolved” and only 13 % think that it has evolved “in the right direction”.
Meanwhile, the optimistic vision on the personal level is based on accumulated confidence in the year’s progress in turnover for 60 % of company heads and employee motivation for 65 % of them. Even if the latter figure has been falling in the last year (74% of bosses in February 2012, 69 % in June 2012), it remains encouraging given the global economic situation, the increase in unemployment, and the drop in purchasing power. But it also coincides with the launch of the French Competitiveness Pact in November 2012 and the accompanying tax break.
Indeed, 19 % of company heads believe that they can use this tax break to hire staff, especially in trade. As for professionals in the industrial sector, they believe that this tax advantage can be used towards investment. However, despite the personal optimism of entrepreneurs, these measures are considered to be inadequate by the latter for relaunching “French enterprise”.
In conclusion, the barometer’s results reflect what France’s worst period since the start of the crisis in 2008, taking into account pessimistic forecasts on growth, budgetary restrictions, difficulties relating to globalisation as well as executive measures considered to be insufficient, or even non-existent.