More than one industrial company in two has started to pass on the rise in raw materials, including energy, in its selling prices, indicates the monthly economic survey of the Banque de France, published on Monday, November 8. And this, while growth promises to be stronger than expected. The financial institution estimates that the increase in gross domestic product (GDP) this year will exceed the forecast by 6.3% and could reach 6.75%, according to a calculation “Arithmetic”. The fourth quarter, in fact, promises to be better than expected, up 0.75 points compared to the third quarter, despite the supply and recruitment difficulties that many industrialists still encounter, especially in the automotive and, to a lesser extent, aeronautics.
“The return of activity to the pre-crisis level is earlier than what we had anticipated, emphasizes Olivier Garnier, chief economist at the Banque de France. It was estimated that it would occur at the end of 2021, it occurs a quarter earlier ”. It is activity in the service sector, particularly catering, that drives growth, while the industry still suffers from shortages of raw materials and supply difficulties. If the latter eased a little in the building industry in October (58% of companies say they are concerned, against 62% in September), they remain very strong in industry, where they affect, as in September, 56% of companies. .
In addition, business leaders are beginning to pass on the rise in raw material prices or energy prices to their selling prices. In industry and construction, nearly 35% of business leaders said, during the survey conducted between October 27 and November 4, that they had increased their selling prices to cope with the rise in the price of products and input materials. In addition, the share of business leaders declaring a price increase is “Almost systematically” higher than it was a month earlier, which signals “Surprises on the rise”.
Recruitment difficulties on the decline
However, this trend does not seem likely to fuel higher consumer prices in the short term, says Garnier. For several reasons. On the one hand, because manufacturers do not fully pass on the increases, but still absorb a part of the additional costs in their margins. On the other hand, because “Industry prices weigh only a small part in the household consumption basket, which is mainly made up of services”, recalls Mr. Garnier.
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