Inflation and energy prices weigh on the local economy

In an uncertain context characterized by inflation, particularly in the energy sector, companies announce forecasts of increasing turnover. However, economic decision makers remain very cautious with rising prices, hiring difficulties and ending aid. For 2023, we expect a slowdown in activity.

The situation of the economy and businesses is very mixed in the light of the return of inflation. The huge increase in energy prices, which is expected to increase further in 2023, affects all sectors. More than ever, companies will have to adapt. “In 2022 we can talk about resilience. Growth is better than expected with GDP growing by 2.6%” explains Philippe Bigot, departmental director of the Banque de France. It should be noted that according to a study by the Banque de France that questioned 1,400 companies in Occitania, the top management announced an 8% increase in turnover, or 2% more than the sector’s forecasts at the beginning of the year, and 11% or 3 % more in market services. Only the construction sector stands out by lowering its sales forecasts by 1%.

Unemployment is falling

Trends that can be found in the Hautes-Pyrenees. “We note excellent progress in the activity of companies open to international markets (railway, medical, engineering, etc.)” points out Philippe Bigot. As proof of this dynamism, outstanding bank loans increased overall by 5.3%. Corporate bank deposits have increased by 15% over the past three years, while loans have increased by 35%. “In the Hautes-Pyrénées, in the short term, there are positive signs with a good trend in the turnover of companies with the exception of the construction and hotel sector in Lourdes. Good investment trends in 2021 and 2022 thanks in particular to the recovery The situation employment is improving The unemployment rate reached 7.9% against 9% in 2020. Cash flow increased by 15%.

The situation is less favorable in tourism and especially in the hotels and restaurants of Lourdes. “Thus the activity of the hotel-restaurants in the Lourdes sector will struggle to reach two-thirds of the pre-crisis level for the whole of 2022 due to the lower turnout from the group’s customers and foreign tourists” explains Philippe Bigot .

Slowdown in 2023 before recovery in 2024?

The year 2023 is expected to slow down. How tall ? Difficult to answer. “The energy shock should lead to a drop in production and a slowdown,” observes Philippe Bigot. Economists and the Banque de France are hoping for a recovery by 2024 with a slowdown in the rise or even a fall in energy prices. Meteorologists are probably counting on a solution to the war in Ukraine by then.

In the meantime, we’ll have to make do. Philippe Bigot sees “supervisory signals are following: corporate profitability is falling sharply even if it remains positive. Cash levels are less favorable. Profitability forecasts are revised downwards and the number of business failures has started to rise again. if the level is still lower than in 2019 “

And then comes the repayment of the State Guaranteed Loans (PGE). In the Hautes Pyrenees 280 million euros were distributed to businesses.

“There are already 28% that have been reimbursed. In the hotel and restaurant sector, only 16% have already been reimbursed”, explains the director of the Banque de France.

Vigilance, points of fragility, will the departmental economy have to resist in 2023 before a restart in 2024?

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