The regional management of the Bank of France in the Grand Est region has revised its 2021 forecast upwards. “Industrial activity in the Grand Est region should increase by 10.8% in 2021, but only 8.6% was announced earlier this year, so recovery is faster than expected.”Laurent Safke, Regional Director of the Bank of France in Strasbourg, said. “In services, activity recovery is already 7.3%, compared to the 4.1% forecast at the beginning of the year, but the construction and utilities sector is seeing the most dynamic exit from the crisis, with a recovery of 11.4% and above all. More profitable than expected “Laurent Sahuquet explains.
The sudden end of the health crisis
In the Grand Est region, economic activity suddenly stopped in early 2020. The situation was particularly severe in Alsace, which was hit at the forefront by the health crisis in March, April and May 2020. “Continuous research on the balance sheets of companies with sales of more than € 750,000 confirms that the situation is not worse than we were afraid of.”Analyze Laurent Sahuquet. “Industrial activity fell by 11.4%, but the income statement held up very well.”, He observes. Other sectors have held up better in the face of the 2020 crisis. Last year’s Grand Est region retail sales fell by just 1.6% due to an increase in the workforce (+ 0.4%). During this year’s crisis, market services lost 6.8% of sales and the construction sector (building, public works) fell 6%.
The Bank of France has pointed out in a regional economic survey that the total debt of companies has increased significantly. Especially in the construction sector, the debt ratio rose from 36.4% in 2019 to 55.2% in 2020. “Even if many companies choose to pay attention to state-guaranteed loans, measures to support the economy are fully functioning in the Grand Est region. Total debt is increasing. But cash is also increasingAnalyze Laurent Sahuquet. 18% to 25% of companies in the region are already planning to repay their PGE in full in 2021.
More vulnerable sector
In the Grand Est region, industry makes up almost 18% of the workforce. That is, 5% to 6% more than the French average. Out of the crisis, the region’s major sub-sectors are merging with the most exposed sectors on a national scale, including transportation equipment, metallurgy, accommodation and catering. “There is no fragile company type”Nuance but Laurent Safke. “Two key factors can still delay recovery. Difficulty in supplying electronic components is now affecting the production chain of the automotive industry. They were announced by Renault of the Stellantis Group in 2022. It can affect the growth of existing Grand Est, and their subcontractors are very present. “Warns the regional director of the Bank of France.
From Vosges to the Ardennes, the timber industry is also weakening, with imbalances in supply and demand and rising raw material prices. It is difficult for businesses to pass on these price increases to selling prices, which can affect margins. “This difficulty is only temporary.”Predict Laurent Sahuquet.
Another more structural difficulty in the Grand Est region is the essential trade in services (transportation, catering, hotels), despite the requalification program conducted by the regional council, the leader of training experts. It is related to the difficulty of hiring. “Measures envisioned by politicians take time to produce their effects.”Recognize Laurent Sahuquet. Employment in the Grand Est region creates a huge gap between large cities that are not always optimal and certain surrounding areas. INSEE is a regional survey on housing migration and employment concentration published in August 2021 that shows good migration in “declining employment” areas adjacent to metropolitan areas (Lance, Nancy, Mets, Strasbourg). I decided that I was maintaining the balance. The unemployment rate in Haguenau (Baran), which has a strong international industrial presence, is 5 points lower than in the neighboring Strasbourg metropolitan area (11%), despite the headcount reductions announced by large local companies such as Schaeffler. I am. Wrigley in France or Mars.
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