French economic recovery boosted morale of American investors

Clouds gradually disappear on the French economy. Two years after being distressed, the indicators turn green one after another. According to the latest barometer released on Wednesday, February 16, the slowdown in pollution and the recovery of 2021 growth to 7% have boosted US investor morale. Amcham (French Chamber of Commerce) And consulting firm Bain & Company. 74% of respondents said that changes in the economic situation of the active sector over the next two years will be positive, compared to 39% in 2020 and 41% in 2019... On the other hand, only 4% have declared that the economic situation will be negative, compared to 5% in 2020 and 11% in 2019. Finally, 22% expect a stable economic situation.

“2020 was a year of cataclysm. Morale has dropped significantly. A year later, US investors have greatly increased their confidence.” Marc-AndrĂ© Kamel, Partner and Director of Bain & Company and Vice President of AmCham France, said:

“This is explained by the resilience of the French economy and the strong recovery of economic growth.” He recalled and explained at a press conference: “American companies are the first investors and the first foreign employers in France.” Despite this new optimism, most forecasters have revised down their growth rates in the first half of this year. Omicron waves and pollution peaks in the past few weeks have weakened certain sectors of activity that are already suffering. Price pressure is also worried about 56% of the investors surveyed.

INSEE expects inflation to rise from 3% to 3.5% by the end of June.

Almost half of investors expect to hire

In terms of employment, the morale of American investors established in France is good. Therefore, almost half of the respondents say that their company’s workforce in France will increase over the next few years. This is 24 percentage points more than in 2020. This ration will return to pre-crisis levels in 2019.

Conversely, 7% show that the workforce will decline in the next few years. This is 21 points less than in 2020. Finally, 42% of respondents say the wage bill will remain stable in the near future, compared to 45% in 2020. If France recorded record job creation last year “Nevertheless, there is a restructuring.” Shade Mark Andre Camel. The chamber of commerce warns that hiring tensions may also increase. “This is a global phenomenon and France is inevitable. There is a clear quest for meaning at work among employees.” Bijan Eghbal, President of AmCham France, adds.

France’s strengths in 2022

Among the criteria cited by American investors to make decisions, first and foremost are economic background (79%), legal certainty (70%), social and political climate (83%), and work. Qualification (74%). Or the availability of the workforce (68%). “Respondents also mention the importance of the size of the French market.” Add Mark Andre Camel.

Among the factors that are of little importance from an investment decision perspective is the cultural environment. One-third of respondents explain that this factor is not required. Even more surprising, 25% of investors say that energy supply and energy costs are not important investment determinants. Finally, quality of life is also one of the least frequently mentioned criteria. One in five respondents said it was not important when making investment decisions.

Life in France according to foreign workers

As part of this investigation, the consulate also asked foreign employees about the strengths and weaknesses of France’s appeal. On the positive side, 89% of those asked emphasize quality of life and local culture. Next are access to medical services (88%) and quality of transportation and communication infrastructure (79%). Conversely, personal taxation (77%), social conditions (62%), and housing (40%) are cited as the three main negative factors.

On the business side, innovation is often cited as an asset in France (82% of respondents), especially thanks to the state’s support for a quality workforce (engineers, developers) or the new economy. Meanwhile, 48% report that the French legal framework is a weakness in terms of innovation and digital technology.

President: Moderate impact on investment decisions

Within 200 days of the first round of the presidential election, the campaign is struggling to emerge. Due to the eruption of a variant of Omicron at the end of 2021 and tensions in the medical system, most of the candidates considered combat plans to promote the program. On the investment side, the presidential election seems to have had little impact on the investment strategies of American companies.

In fact, 63% of investors say the outcome of this election will not influence this type of decision. Conversely, 37% believe that the outcome of this vote could influence the decision of the parent company.Asked about this gallery, Mark Andre Camel recalls “There is a real disconnect between the outcome of the election and the investment decision. France maintains legal certainty and predictability. That is really important.”

Methodology: A survey conducted by a questionnaire sent to the manager of a subsidiary of a French American company between December 2021 and January 2022. 121 responses were collected from US companies.