22 October 2020
N° 2020-270

In October 2020, the business climate has sharply deteriorated in servicesMonthly survey of services - October 2020

According to the business managers surveyed in October 2020, the business climate in services has sharply deteriorated, putting a halt to the rebound started in May. At 89, the business climate composite indicator has lost 5 points this month and stands far below its long-term average (100).

Informations rapides
No 270
Paru le : Paru le 22/10/2020
Prochaine parution le : 17/12/2020 at 08:45 - December 2020
Informations rapides  No 270 - October 2020

According to the business managers surveyed in October 2020, the business climate in services has sharply deteriorated, putting a halt to the rebound started in May. At 89, the business climate composite indicator has lost 5 points this month and stands far below its long-term average (100).

Business climate composite indicator

Business climate composite indicator
Business climate composite indicator
1998-01 104.4
1998-02 105.6
1998-03 106.8
1998-04 108.0
1998-05 107.7
1998-06 107.3
1998-07 106.9
1998-08 106.0
1998-09 105.2
1998-10 104.3
1998-11 102.5
1998-12 100.6
1999-01 98.7
1999-02 99.6
1999-03 100.5
1999-04 101.4
1999-05 102.9
1999-06 104.4
1999-07 106.0
1999-08 108.7
1999-09 111.5
1999-10 114.2
1999-11 112.7
1999-12 111.2
2000-01 109.6
2000-02 109.0
2000-03 108.5
2000-04 107.9
2000-05 110.7
2000-06 113.5
2000-07 112.1
2000-08 114.1
2000-09 115.4
2000-10 114.8
2000-11 113.8
2000-12 114.3
2001-01 113.5
2001-02 112.3
2001-03 112.5
2001-04 108.5
2001-05 106.0
2001-06 105.8
2001-07 103.7
2001-08 103.0
2001-09 101.7
2001-10 97.1
2001-11 96.5
2001-12 96.9
2002-01 97.8
2002-02 99.0
2002-03 102.6
2002-04 104.6
2002-05 105.4
2002-06 103.0
2002-07 101.4
2002-08 100.1
2002-09 98.3
2002-10 98.9
2002-11 100.2
2002-12 101.1
2003-01 97.9
2003-02 96.6
2003-03 92.0
2003-04 89.3
2003-05 93.3
2003-06 94.8
2003-07 97.8
2003-08 99.1
2003-09 100.0
2003-10 100.7
2003-11 102.1
2003-12 104.3
2004-01 106.4
2004-02 106.4
2004-03 106.2
2004-04 106.0
2004-05 106.6
2004-06 105.5
2004-07 106.6
2004-08 106.2
2004-09 105.5
2004-10 106.7
2004-11 106.2
2004-12 108.9
2005-01 106.7
2005-02 106.5
2005-03 108.4
2005-04 108.1
2005-05 106.2
2005-06 108.4
2005-07 107.8
2005-08 107.5
2005-09 107.1
2005-10 108.6
2005-11 106.6
2005-12 106.9
2006-01 108.8
2006-02 106.4
2006-03 107.7
2006-04 108.0
2006-05 110.5
2006-06 109.2
2006-07 110.4
2006-08 110.5
2006-09 110.7
2006-10 110.9
2006-11 113.0
2006-12 111.5
2007-01 110.9
2007-02 112.3
2007-03 113.3
2007-04 113.0
2007-05 112.9
2007-06 112.6
2007-07 113.1
2007-08 112.3
2007-09 111.5
2007-10 110.2
2007-11 110.3
2007-12 109.3
2008-01 110.6
2008-02 108.8
2008-03 108.9
2008-04 107.4
2008-05 104.9
2008-06 101.9
2008-07 97.7
2008-08 96.2
2008-09 94.3
2008-10 85.9
2008-11 82.0
2008-12 78.9
2009-01 76.4
2009-02 75.2
2009-03 70.2
2009-04 70.4
2009-05 74.3
2009-06 78.8
2009-07 82.3
2009-08 84.9
2009-09 88.0
2009-10 91.1
2009-11 92.5
2009-12 93.0
2010-01 94.4
2010-02 94.6
2010-03 94.8
2010-04 97.9
2010-05 99.5
2010-06 98.7
2010-07 99.5
2010-08 101.0
2010-09 101.9
2010-10 103.2
2010-11 105.0
2010-12 107.0
2011-01 107.3
2011-02 109.4
2011-03 110.5
2011-04 109.2
2011-05 107.9
2011-06 107.4
2011-07 105.5
2011-08 101.1
2011-09 99.0
2011-10 97.9
2011-11 95.8
2011-12 95.5
2012-01 93.6
2012-02 93.0
2012-03 94.4
2012-04 96.3
2012-05 92.8
2012-06 90.8
2012-07 90.4
2012-08 88.4
2012-09 88.1
2012-10 86.9
2012-11 86.4
2012-12 87.9
2013-01 88.9
2013-02 87.7
2013-03 85.0
2013-04 84.1
2013-05 85.5
2013-06 86.8
2013-07 87.3
2013-08 89.2
2013-09 92.7
2013-10 92.2
2013-11 92.9
2013-12 91.5
2014-01 92.8
2014-02 92.6
2014-03 93.5
2014-04 93.8
2014-05 92.8
2014-06 92.8
2014-07 93.1
2014-08 92.1
2014-09 91.6
2014-10 91.8
2014-11 91.8
2014-12 91.9
2015-01 91.6
2015-02 92.0
2015-03 92.8
2015-04 94.3
2015-05 95.8
2015-06 97.2
2015-07 97.8
2015-08 98.9
2015-09 97.9
2015-10 99.9
2015-11 99.6
2015-12 97.5
2016-01 100.3
2016-02 100.2
2016-03 99.8
2016-04 98.7
2016-05 101.0
2016-06 99.4
2016-07 100.6
2016-08 100.3
2016-09 101.1
2016-10 101.0
2016-11 101.1
2016-12 103.8
2017-01 101.9
2017-02 102.9
2017-03 103.5
2017-04 103.3
2017-05 103.0
2017-06 103.7
2017-07 104.0
2017-08 106.0
2017-09 106.7
2017-10 106.9
2017-11 107.5
2017-12 108.8
2018-01 107.8
2018-02 106.6
2018-03 106.8
2018-04 106.0
2018-05 104.5
2018-06 105.0
2018-07 104.5
2018-08 103.9
2018-09 104.6
2018-10 103.4
2018-11 103.9
2018-12 102.3
2019-01 103.7
2019-02 103.6
2019-03 104.8
2019-04 105.6
2019-05 105.9
2019-06 106.4
2019-07 105.2
2019-08 104.8
2019-09 105.8
2019-10 105.9
2019-11 106.3
2019-12 106.7
2020-01 106.3
2020-02 105.9
2020-03 93.0
2020-04 41.5
2020-05 51.8
2020-06 78.3
2020-07 88.5
2020-08 93.1
2020-09 94.4
2020-10 89.2

Business climate composite indicator

  • Source: INSEE

The activity prospects have continued to darken

In October 2020, the balance of opinion on the general outlook of the sector activity has fallen again. It therefore remains significantly below its average level. Business leaders are much more pessimistic than in the previous month about their own prospects for the next three months: the balances on expected activity and expected demand have plunged and moved further away from their average. However, the business leaders have generally reported that their past turnover increased over the past three months: the corresponding balance of opinion has continued to rebound and exceeds its long-term average. Similarly, the balance on past prices has continued to rise and exceeds its average level, while the balance on expected selling prices has fallen sharply this month and has moved away from its average.

Concerning employment, the balance of opinion on the workforce size for the last three months has slightly increased but remains below its average. The one on expected workforce size has declined well below its own average. Slightly more business leaders than in July have reported difficulties in recruitment but this proportion remains below this average level.

The balances of opinion on investment, past and expected, have edged down this month, thus remaining below their average. As in July, the business leaders have reported more often difficulties related to demand than to supply.

Economic outlook in the services sector

Balances of opinion, in %, seasonally adjusted
Economic outlook in the services sector (Balances of opinion, in %, seasonally adjusted)
Average* Jul. 2020 Aug 2020 Sep. 2020 Oct. 2020
Composite indicator 100 88 93 94 89
General outlook -7 -16 -13 -16 -20
Past activity 1 -55 -25 1 7
Expected activity 1 1 -2 -5 -14
Expected demand -1 -4 -5 -7 -17
Past selling prices -4 -14 -10 -6 -2
Expected selling prices -3 -6 -6 -5 -11
Past employment 2 -48 -20 -4 -3
except temporary work agencies 0 -40 -19 -11 -13
Expected employment 2 -5 -1 -2 -8
except temporary work agencies -1 -11 -8 -7 -11
Investments
Past investments 1 -31 -18 -9 -10
Expected investments 1 -12 -8 -7 -9
Operating balance result
Past result -2 -59 -4
Expected result -2 -8 -17
Cash position -11 -27 -17
Difficulties of supply and demand
difficulties of supply and demand 10 12 13
difficulties of supply only 23 18 14
difficulties of demand only 31 31 31
Difficulties in recruitment 29 20 22
  • * Average since 1989 for the composite indicator and since 1988 for the balances of opinion
  • Source: INSEE, monthly business survey in services.

The business climate has deteriorated sharply in accommodation and food services

In October, the business sentiment has sharply deteriorated in the sub-sector of of accommodation and food services, in connexion with the strengthening of health containment measures. At 79, the business climate has lost 10 points and stands far below its average. The main balances of opinion have fallen, particularly those on the short-term activity and demand prospects.

In the sub-sectors of road freight transport, real estate activities, and administrative and support service activities, the business climate has sharply deteriorated in October and has moved away from its long-term average. Activity prospects, both general and individual, as well as demand for the next three months have been assessed more unfavourably than in September.

In professional, scientific and technical activities, the business climate indicator has slightly fallen back and remains below its average level.

The business climate has slightly improved only in information and communication, while remaining well below its long-term average.

Business climate composite indicator and balances of opinion by sub-sector in services

Balances of opinion, in %, seasonally adjusted
Business climate composite indicator and balances of opinion by sub-sector in services (Balances of opinion, in %, seasonally adjusted)
Aggregated classification (NA 2008) at level A21 Mean* Jul. 2020 Aug 2020 Sep. 2020 Oct. 2020
Road freight transport (8%)
Composite indicator 100 99 105 103 98
Past activity -6 -61 -16 8 13
Expected activity -7 4 8 3 -14
Expected demand -9 3 0 -3 -16
Past employment -6 -52 -21 -15 -13
Expected employment -7 0 10 -5 -8
General outlook -19 -10 -8 -16 -24
Accommodation and food service activities (11%)
Composite indicator 100 88 87 89 79
Past activity -7 -85 -30 14 0
Expected activity -8 0 -21 -17 -31
Expected demand -10 -7 -19 -20 -37
Past employment -5 -63 -26 -13 -16
Expected employment -6 -18 -18 -10 -24
General outlook -14 -32 -33 -46 -54
Information and communication (26%)
Composite indicator 100 86 89 90 91
Past activity 7 -46 -27 -4 8
Expected activity 9 6 2 -4 -9
Expected demand 9 2 0 -9 -18
Past employment 6 -27 -24 -19 -13
Expected employment 10 -12 -5 -10 -5
General outlook 0 -12 -10 -7 -9
Real estate activities (11%)
Composite indicator 100 86 91 95 88
Past activity 7 -22 1 7 1
Expected activity 6 8 1 1 -8
Expected demand 1 2 2 -3 -10
Past employment 2 -22 -5 7 -2
Expected employment 2 -15 -1 5 5
General outlook -4 -8 -13 -11 -17
Professionnel, scientific and technical activities (24%)
Composite indicator 100 85 89 91 90
Past activity -1 -57 -33 -9 1
Expected activity -2 -9 -10 -13 -17
Expected demand -5 -14 -14 -15 -17
Past employment 1 -33 -18 -5 -9
Expected employment 0 -16 -13 -11 -9
General outlook -9 -25 -17 -18 -19
Administrative and support service activities (18%)
Composite indicator 100 92 100 99 93
Past activity 5 -67 -27 7 19
Expected activity 5 6 11 6 -6
Expected demand 3 3 11 4 -9
Past employment 8 -61 -24 8 15
Expected employment 7 8 11 11 2
General outlook -4 -9 -5 -12 -18
  • The figures in parentheses indicate the weights used to aggregate the sub-sector balances of opinion.
  • *Composite indicator: average since 1989 (2006 for road transport); balances of opinion: average since 1988 (2006 for road transport)
  • Source: INSEE, monthly business survey in services.

Revision

The business climate in September 2020 has been revised downwards by one point due to the inclusion of late responses from businesses.

For further information

A balance of opinion is calculated as the difference between the percentage of “increase” responses and the percentage of “decrease” responses.

Since the definitive data of April 2020, the way of correcting mode of non-response has been modified. The usual method was to fill in missing answers by carrying on past answers from non-responding companies. The results are now computed on the sole basis of responding companies.

Responses to this survey were collected between September 28 and October 19, 2020.

Additional information (simplified and detailed methodology, nomenclature, etc.) is available on the “Documentation” tab of the web page of this publication.

Next issue: 24 November 2020 at 8:45 am

A balance of opinion is calculated as the difference between the percentage of “increase” responses and the percentage of “decrease” responses.

Since the definitive data of April 2020, the way of correcting mode of non-response has been modified. The usual method was to fill in missing answers by carrying on past answers from non-responding companies. The results are now computed on the sole basis of responding companies.

Responses to this survey were collected between September 28 and October 19, 2020.

Additional information (simplified and detailed methodology, nomenclature, etc.) is available on the “Documentation” tab of the web page of this publication.

Next issue: 24 November 2020 at 8:45 am


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