Between inflation and the conflict in Ukraine, the economic context appears uncertain for business leaders.
While gross domestic product (GDP) finally contracted by 0.2% in the first quarter in France, French business leaders seem to be navigating “uncertainty“.
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“All the bosses I meet are in great uncertainty“, declared this Wednesday, Geoffroy Roux de Bézieux, president of Medef, on France Info. “On the one hand, activity is not catastrophic even if there is a drop in consumption in April and it seems in May. And at the same time, there are a lot of dark clouds on the horizon, a lot of uncertainty. We enter a world that we do not know well, the world of inflation“, he added.
Inflation actually accelerated again in France in May, to 5.2% over one year, exceeding the 5% mark for the first time since September 1985. For its part, the decline in household consumption is even more marked than previously estimated by the National Institute of Statistics, the purchasing power of households having fallen by 1.9% in the first quarter, burdened by inflation.
Russian oil embargo ‘will hurt’
Added to this is the conflict in Ukraine and the new agreement of the 27 for an embargo on Russian oil. “It is a necessary evil. Politics must take precedence over economics» at the moment, for Geoffroy Roux de Bézieux. The embargo “will hurt“, he assures, but”we must assume“. Despite this uncertain context for business leaders, “I don’t see bosses demoralized or in the process of laying off workers. On the contrary, we are rather in the process of hiring“Says the boss of Medef.
Regarding the increase in wages by companies, requested by Bruno Le Maire, Minister of the Economy, “companies have played the game», affirms Geoffroy Roux de Bézieux by highlighting that on average, there was «3% salary increase at the start of the year, which represents 3 out of 4 companies“. “ There are companies that will distribute bonuses or reopen negotiations, but they are the ones that can.“, arguing that with the current situation, in particular the rise in raw materials, some have their margins down.
But to succeed in convincing new employees to join them, companies in need of manpower will have no choice. “Wages will be reviewed because we can not hire. The law of supply and demand has shifted in favor of employees», for Geoffroy Roux de Bézieux. “I don’t know any bosses who don’t have a hard time hiring. We have structurally before us a problem of job offer» because of demographics
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The employers’ organization also proposes the creation of a special tax-exempt premium “fuelwhich is adapted to the mileage of people and which would be financed by the companies which can, while 78% of French people take their car to go to work, recalls the boss of Medef.
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