Recruitment difficulties at the highest levels

Posted on Jul 12, 2022, 9:05 PM

In an unprecedented and uncertain context hitting the economy, the Bank of France economic report with 8,500 business leaders, published on Tuesday, brings two reassuring news. First, after the increase in April and especially in May, activity stopped well in June.

Hence, Olivier Garnier, chief economist at the Monetary Institute, said: “I confirm my estimate of a 0.25% increase in GDP in the second quarter.” A performance in line with the “central scenario” was revealed on June 21, a 2.3% increase in GDP in France this year, close to that of Bercy (2.5%).

The second message from the central bank is about prices: for the second month in a row, the share of business leaders who raised their selling prices fell in June. Elle se maintient toutefois à un niveau inhabituellement élevé : la moitié des patrons disent avoir fait passer des hausses dans le bâtiment, 36% dans l’industrie (davantage dans la chimie, l’industrie du bois du oust du cais %25) Services. “In normal times, less than 5% of managers say they raise their prices,” Olivier Garnier recalls.

It is certain that the industry as a whole is operating at 79% of its production capacity with utilization rate above the historical average in most sectors. But 59% of companies still experience difficulties in supplying (52% in construction). While it has dissipated in clothing and footwear, tensions remain high in the automotive and chemical sectors. In July, the outlook for these two sectors, unlike most other industrial subsectors, deteriorated.

The survey also shows that the labor shortage is getting worse month by month. In June, 58% of businesses surveyed were affected, an increase of three points from one month. This is, according to the Bank of France, “the highest level reached” since the spring of 2021, when the question began to be raised. At that time, only 37% of managers had this problem.

Today, all sectors are affected. But hiring difficulties progress more in services (+5 points) than in industry or construction, even reaching records in consulting and programming, temporary work or cleaning (63%). Between the arms shortage and the return of Covid, activity in services should only “moderately” progress in July. “The recovery was rich in job creation,” Olivier Garnier analyzes.

Added to this are the ongoing problems of training and matching profiles on demand. “We must deal with this problem from the beginning of the school year in September,” said the Minister of Economy and Finance, Bruno Le Maire, at the Aix-en-Provence economic meetings held from Friday to last Sunday. After purchasing power, labor shortage is the second priority which the government intends to address.

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