24 November 2020

2020- n° 293

The business climate in wholesale trade has deteriorated in November 2020 Bi-monthly survey of wholesaling - November 2020

According to the managers surveyed in November 2020, the business climate in wholesale trade has deteriorated a little between September and November. The composite indicator has lost 3 points and stands at 87, well below its long-term average (100). From May to September the business climate had only caught up with half of its fall related to the first lockdown. Between September and November, the balances of opinion related to ordering intentions and to the general business outlook have driven down the business climate.

The balance of opinion on the general business outlook in wholesale trade has sunk to −66, almost as low as in May 2020 (−72). Nevertheless, companies seem to be more pessimistic regarding the sector’s outlook than regarding their own situation. Indeed, although more wholesalers than in September have declared their ordering intentions to be lower than usually for this time of the year, the related balance of opinion has remained far above its May level.

The balance of opinion on ordering intentions for the next two months has diminished in all sub-sectors and remains everywhere well below its average level. It has shed 13 points in the wholesale trades of raw agricultural products and of information and communication equipment. The balance has lost 9 to 10 points in the wholesale trades of food products and beverages, of domestic goods and of other industrial capital goods. The drop is sharp (−7 points) but of a lesser extent in the other specialised wholesale trade (intermediate products, fuel, chemicals and the like).

Wholesalers expect the foreign demand to remain dull over the next two months since the balance of opinion related to shipments abroad has been stable, at a level well below its mean, after having fallen in September. As for the balance regarding ordering intentions from abroad, it has stepped back further away from its mean, signalling that the French wholesalers’ demand has decreased.

From September to November 2020, the balances of opinion related to the activity of the past two months – sales and received merchandise – have hardly risen, after having recovered strongly from July to September. But the cumulated hikes since May have not offset the severe drop recorded between January and May.

The balance of opinion regarding forecasted workforce size has receded to a level almost as low as in May. The balance regarding the recent change in workforce size has grown again, but much more slightly than in September.

In November, the balances of opinion regarding past and expected selling prices have fallen back noticeably and have lost 6 points each. They had decreased by 7 points in May. Both were already well below their long-term average in September.

Hardly more wholesalers have considered their cash flow situation to be difficult in November than in September. The related balance has lost one point and has reached its average.

The business climate indicator in wholesale trade of September 2020 has been updated from 92 to 90 as a result of the integration of belated business answers.