This Point de Conjoncture is the seventh that INSEE has published since 26 March. It is also the last to be produced in this format until September: this summer, INSEE will provide an in-depth commentary on the business tendency surveys when they are published on 23 July and 27 August. A fuller version of the Point de Conjoncture will then be prepared in early September.

Over the last four months, with access to high-frequency data, we have been able to assess at a fairly early stage the decline in activity linked to lockdown. From these data we were also able to confirm that the lifting of lockdown led automatically to a rapid upswing in activity, although in some sectors the end of lockdown and the beginning of recovery took place more gradually than the introduction of lockdown and the halt in activity.

Alongside these Points de Conjoncture, INSEE has continued to publish the usual short-term indicators, most of them on a monthly basis. Indicators covering activity followed a common profi le and will obviously continue to do so, linked very closely to the lockdown calendar: first dip in March, accentuated in April, start of recovery in May, confirmed in June. In addition, the suddenness and scale of this unprecedented shock will give economic forecasters a better understanding of the dynamics of some of these indicators; for example, the VAT declarations that are the best indicator of activity in the services sector are certainly a little more smoothed in some sectors than actual activity today.

Quarterly profi les will also be affected by the lockdown calendar. This period accounted for one sixth of accounts in Q1, and will represent almost half of the accounts for Q2. And the figure for the decline in activity in Q2, which we currently estimate at –17% and which will be the subject of the first publication by INSEE’s national accountants at the end of July, masks a gradual but steady recovery, especially from mid-May onwards.

For the first time since the start of the health crisis, today we are presenting a forecast for the coming quarters. Traditionally, in June, the forecasting period for INSEE’s Conjoncture in France looks to the end of the year; for this we rely on the business tendency surveys of companies in the different sectors of activity, because their expectations are usually fairly reliable for the next three or six months. The exceptional uncertainty associated with the health crisis resulted in our suspending this practice due to its very fragile nature. But today, we believe that we can once again rely on the responses that businesses have provided to shed light on the end of the year. In addition to the usual monthly surveys, the survey carried out since March specifically on the initiative of DARES appears to provide useful information, provided of course that the health situation does not deteriorate.

We now anticipate that the order of magnitude of the drop in GDP in 2020 could be around ten points, or a little less. However, it is ridiculous to suggest that this would set us back ten years into the past. This drop in the annual average is of course linked mainly to the slump in the months of lockdown, however, while the economy has not emerged unscathed, it is probable that in the next few months it will return to a level closer to that which prevailed before lockdown. The indicators that we are analysing today confirm the robustness of consumption since mid-May and a significant upswing in all sectors, apart from those like air transport or the entertainment industry, which are still under restrictions due to pandemic prevention measures.

INSEE would like to thank all the partners who have provided access to high-frequency data, and we hope that this cooperation can continue: these data will still be useful in the future. The traditional tools, such as the business tendency surveys, should recover their predictive power, and will be analysed in depth each month. Statistics relating to Q2, either the quarterly accounts (for which the first estimates will be published on 31 July) or fi gures for employment (on 7 August) and unemployment (on 13 August), will be the subject of detailed analysis since lockdown has had a major impact on these figures. Lastly, INSEE will attempt to provide as much information as possible to demonstrate the diversity of situations, both in businesses and households.

 

Jean-Luc Tavernier