Paris-(Business Wire) – unchanged from last year, more than half of French mid-sized business leaders are optimistic about the global (58%), national (56%) and local and regional (55%) economic outlook for the year ahead Annual outlook survey of French business leaders. While 53% expect a recession in 2023 – lower than their European counterparts in the UK (69%) and Germany (59%) – and are bracing for its impact.
Olivier Simon, Head of French and Benelux Commercial Banking at JPMorgan, said: “The challenges that French mid-sized and fast-growing companies have faced over the past few years have prepared them for the year ahead to deal with heightened uncertainty. “Business decision makers continue to demonstrate their ability to quickly adapt to and overcome global and local challenges.”
In a survey of more than 250 senior executives from French medium-sized companies, business leaders continue to demonstrate their confidence and resilience. While many are preparing for a recession in 2023, nearly three-quarters (72%) plan to maintain or increase headcount in the coming year, with more than two-thirds (68%) of French medium-sized businesses leading Those still expect to increase headcount In terms of revenue and sales, six in 10 (61%) expect profits to increase.
“Many French companies have had to adapt to today’s high inflation situation and other external pressures,” said Kyril Courboin, head of JPMorgan France and a senior country official. “Despite their realistic expectations of real threats to the future, French business leaders remain quite optimistic about business growth.”
Dealing with inflation and addressing supply chain challenges
As inflation remains the biggest challenge facing the global business community, more than half (56%) of French business leaders have experienced rising costs as a result.
- Impact of Business Leaders: Among businesses experiencing inflation challenges, two-thirds (67%) of respondents said higher raw material costs, as well as higher energy costs (62%), were driving higher business costs.
- Responses from business leaders: To help compensate, a majority of leaders (70%) say they offset up to half of increased costs by passing them on to consumers. Of those, 85 percent are likely to continue raising prices for consumers in the coming year.
Additionally, many business leaders reported ongoing supply chain challenges, with 63% noting that conditions had worsened over the past 12 months.
- near horn: In response, 35% of French medium-sized business leaders continue to move manufacturing to new regions, and over 30% are now adding new suppliers from new regions, a trend that will accelerate from 2022 onwards.
- other adjustments: Slightly more business leaders (38 percent, up 5 percent from 2022) are also increasing funding allocations to cover higher costs associated with mobile products, while a similar proportion are changing materials or manufacturing processes.
Dealing with energy uncertainty, the biggest challenge facing French business
A third (33%) of French business leaders see energy prices as the biggest external threat, which remains the highest among their European counterparts: the UK (25%) and Germany (23%). As a result, companies that see energy prices as the biggest external threat plan to invest in renewable energy in the coming year (69%).
Address labor market challenges and address social and environmental pressing issues
French policymakers continue to grapple with complex job market and labor shortage issues, with a majority expecting to increase (41%) or maintain (31%) headcount over the next 12 months.
To help retain and attract talent, business leaders respond to employee expectations by:
Increased wages and benefits (46%)
Offer flexibility in when and where you work (43%)
Invest in automation technology (43%)
Offer flexible working hours (42%)
Corporate social responsibility also remains a priority for French medium-sized business leaders, who are increasingly focusing on environmental factors such as carbon reduction, waste management and energy efficiency (54%, up 21% from 2022), especially given the current The energy crisis and conservation strategies are being pursued across France. Additionally, 44% claimed that focusing on energy and environmental considerations enabled their companies to establish or strengthen their presence in the community, subsequently enhancing marketing and finding new customers (43%).
Business for the coming year
Over the next year, decision makers are focused on expanding into new markets—domestic and international (46 percent and 42 percent, respectively)—and prioritizing profitable products and services (40 percent) and new offerings Roll out (32 %).
Furthermore, the majority of French business leaders have transition plans in full or in part, with a third planning to transfer to the family (50%, up 10% from 2022) or sell to a third party or sales management team (33%) . Absolutely A majority (67%, up 23% from 2022) expect these shifts to occur within the next two years.
For more information on the French Business Leaders Outlook 2023, visit jpmorgan.com/business-outlook-FRA.
JPMorgan’s Outlook Survey of Business Leaders will be conducted online from November 21 to December 8, 2022. A total of 254 business leaders (CEOs, CFOs, Treasurers and owners) from French medium-sized companies (with annual revenues ranging from € 20 million to € 2 billion) across various industries. The results were within the statistical parameters of validity with an error rate of +/- 6.2% at a 95% confidence level.
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