Informations Rapides · 26 May 2021 · n° 134

In May 2021, the French business climate has improved strongly Business indicator - May 2021

In May 2021, the business climate has improved strongly. The indicator that synthesizes it, calculated from the responses of business leaders in the main market sectors of activity, has gained 12 points. At 108, it has returned above its long-term average (100), for the first time since February 2020, and is even higher than before the health crisis (105). In connection with the gradual easing of health restrictions in France and in many countries, this movement suggests a strong increase in economic activity, without however the overall level of activity returning to its normal level before crisis at this stage. This strong improvement in the business climate is mainly the result of increases in the forward-looking balances of opinion in services.

In retail trade (including trade and repair of vehicles), the business climate has gained 17 points, driven by the vigorous rise in the balance of opinion on the general business outlook for the sector, with in particular the reopening on May 19 of the so-called "non-essential" stores. The climate in this sector has gone back significantly above its long-term average, for the first time since the start of the health crisis.

In the services sector, the climate has gained 15 points, due to the sharp increase in most of the balances relating to the near future. It also has gone back well above its average. In particular, in accommodation and food service activities, the business climate has bounced back extremely sharply, probably driven by the schedule of gradual reopening.

In wholesale trade, the bimonthly business climate has gained 11 points compared to March, amplifying the increase started since the beginning of the year.

In manufacturing, the business climate has gained 3 points, due to the rise in the balances of opinion on production prospects and order books. It has thus surpassed its long-term average even more.

Finally, in the building construction, the balances of opinion relating to the outlook for the next three months are on the rise, order books deemed to be well filled and capacity pressures significant.

At the same time, the employment climate has sharply improved. At 100, it has gone back to its long-term average. This improvement is mainly due to the increase in the balance of opinion on the expected development in employment for the next three months in services excepting temporary employment agencies.

The French business climate and the sector climate in services of April 2021 have both been revised upwards by one point. It is the same for the bimonthly climate in wholesale trade of March 2021. These revisions are mainly explained by the inclusion of late responses from companies.