Covid-19: despite Omicron, the French economy is holding up the shock (for now) – La Tribune

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Closure of nightclubs, strengthening of teleworking, acceleration of vaccination among the youngest …, faced with the threat of the Omicron variant, the government has announced a round of new health rules as the end of year holidays approach. The surge in contamination and the increase in hospitalizations have once again put hospital services under pressure. In this degraded health context, the Banque de France expects an increase in growth in December, subject to the evolution of the pandemic. Gross domestic product is said to be up 0.75 points from its pre-crisis level. However, the central bank, which questioned companies between November 26 and December 3, expressed the uncertainty that weighs in sectors already heavily hit by the pandemic such as hotels and restaurants, aeronautics or leisure. .

“This is the first economic survey carried out after the appearance of the Omicron variant. The beginning of the uncertainties about the health context was known by the companies. Despite the return of health uncertainties, the companies polled say that activity increased in November compared to October. Above all, activity should continue to progress in December “ said economist Olivier Garnier during a press briefing on Tuesday.

The Banque de France did not revise its growth in the last quarter. On the other hand, economists have not announced new projections for 2021 and 2022. New announcements are expected on December 20.

A marginal macroeconomic impact for the moment

The latest measures announced by the executive on Monday December 8 should have a relatively limited impact on the French economy. Given the weight of the sectors subject to closures in the French gross domestic product, the French growth should be spared in the coming weeks if a new tightening is not announced.

“The Prime Minister’s announcements have not resulted in a change in our forecast compared to November […] Even if there is a high degree of uncertainty, the measures announced should not have a significant impact on the activity. On the other hand, there may be an impact on the behavior of agents which is still difficult to assess. In some sectors, there may be an impact such as accommodation and food services “ said Olivier Garnier interviewed by The gallery.

In addition, the experience of the different waves has shown that the economic repercussions were much less than during the first confinement when the French economy had plunged to a record level since World War II. Finally, the vaccination rate of the French population is much higher than during previous peaks of contamination. In the meantime, there are still many uncertainties about this new variant.

Covid: new measures should not disrupt economic growth

Services drive growth, industry is regaining some color

The tertiary economy remains the engine of growth at the end of the year. Services in the market sector are one point above their pre-crisis level. In detail, the financial and real estate sectors are in good health (2 points above). The rise would also be marked in temporary work and car rental.

On the other hand, activity is expected to stagnate in accommodation and catering according to the business leaders questioned. The spread of the Omicron variant in contamination chains can affect the confidence of restaurateurs, hoteliers and customers already marked by these two long years of the pandemic.

On the industry side, optimism is gaining a little ground. Production should accelerate at the end of the year in most sectors according to economic forecasts. The chemical and pharmaceutical industries, the manufacturing of rubber and plastic products as well as electrical equipment would be affected by this increase. Likewise, the automobile which had plunged in recent months should find its colors again in December. Finally, in the building industry, activity is said to be stable.

Supply difficulties

The pandemic continues to disrupt supply chains around the world. In France, the share of companies in the industry expressing such difficulties continued to increase between October and November, going from 56% to 57%. In the building industry, the rise in tensions is also sharp.

“These difficulties continue to exert upward pressure on production prices in these two sectors” say economists.

The repercussions of these bottlenecks mainly continue to affect activity in the automotive sector. Manufacturers have already announced production cuts of several hundred thousand vehicles in 2021 alone. “The automotive industry has been severely affected by semiconductor shortages and supply difficulties. These shortages translate into lower sales and production. In Germany, the decrease is around 30% compared to 2019. The automotive sector is a textbook case. It is deeply embedded in global value chains and represents a very important part of the manufacturing sector “ OECD economist Sophie Guilloux-Nefussi said during a seminar organized on Tuesday by CEPII (center for prospective studies and international information) and the Banque de France.

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Finally, around half of companies are still struggling to recruit. This ratio is relatively stable compared to October and slightly lower compared to September. Here again, the pandemic has completely turned the job market upside down in just a few months. Some employees have definitely left their sector to retrain when others have lost their jobs with no hope of finding an equivalent position. The new health tensions could still cause violent upheavals in the labor market.