The Girondine Economy continues to slow in the third quarter of 2018

Impacted by social movements and an unstable economic climate, the Gironde economy continues to slow down in the 3rd quarter of 2018. Business leaders are cautious about their investments and are closely watching the evolution of regional and national growth. Most sectors of activity are affected in the Gironde economy and the year 2019 is likely to confirm the slowdown.

In 2021, the barometer of the Gironde economy is gradually recovering. This improvement is being made despite the restrictions related to the health context. Indeed even if the main indicators remain negative they are approaching normal. From the ratings of the companies the managers face a tense cash flow. This is explained by the low attendance during the crisis and by a decline in margins. Shops and services were the most impacted with the construction sector. However, they managed to keep their payroll. Faced with the uncertain context, investment projects find it difficult to decide. They are still limited to 23%. However, this represents an increase of 6 points compared to the first quarter. If the whole territory has experienced difficulties, the consequences in Bordeaux have been marked. Revenue fell by 12% as did cash flow.

A cyclical climate in Nouvelle-Aquitaine that impacts the Gironde economy

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The economic climate urges business leaders to be cautious

The economic climate of the Gironde economy in the 3rd quarter is less buoyant and encourages business leaders to be cautious. Indeed, the level of investment has fallen considerably since the beginning of the year and employment has stagnated. According to the barometer of the Chamber of Commerce and Industry of the Gironde for the 3rd quarter of 2018, the balance related to turnover is + 5 points (down 7 points compared to quarter 2), the balance related to order books is + 7 points (down 14 points compared to quarter 2), the balance related to the number of employees was + 3 points (stable compared to quarter 2) and investments by entrepreneurs fell by 26% (i.e. a decrease of 8 points compared to quarter 2).

The outlook for the 4th quarter remains positive in the Gironde economy and business leaders anticipate an improvement in demand. However, the investment and recruitment outlook remains. Thus the anticipated opinion balances are oriented upwards: the anticipated balance linked to turnover is 18 points, the anticipated balance linked to the order books and 16 points, the anticipated balance linked to cash is 12 points the anticipated balance related to the employee workforce is 3 points and the anticipated balance linked to margins and 5 points.

The confidence index falls slightly in the Gironde economy while it deteriorates at the national level

The confidence index represents forecasts of future household and business consumption. It therefore indicates a forecast of national and regional economic growth. The regional confidence level of business leaders in the future of their company decreased slightly in the third quarter of 2018 and reached its level for 2017. The indexes are therefore falling across all sectors but remain at a high level. Construction is the most confident sector with an index of 84% while the industrial sector recorded a loss of 10 points (71% of confident).

Nationally, in the third quarter of 2018, less than one in two entrepreneurs said they were confident, with the index reaching 51% in construction (despite a 7-point decline). Trade registers 38% of confidence, this is the lowest share for a fuck of – 15 points. Bordeaux remains the territory where the index is highest with 47% of confidence (despite a sharp drop of – 15 points).

The slowdown in the girona economy affects all sectors

New Aquitaine business growth disrupted

Social movements have disrupted the activity of New Aquitaine, the impact remains differentiated by sector.

Industrial production

Industrial production is slowing down as a result of an adjustment to demand in the food chain and particularly for meat and poultry. The wood sector confirms a further decline in production driven by difficulties in the supply of maritime pine. The paper/cardboard branch also shows signs of shortness of breath. The manufacture of electronic and optical electrical equipment and machinery is also slowing down slightly while maintaining a high level of activity.

Pharmaceutical industry

On the other hand, the pharmaceutical and chemical industries are increasing their production, driven by bioethanol, perfumery and cosmetics. Activity is growing again in the construction of transport equipment, although the situation at some sites of traditional automotive players remains a concern. The manufacture of metal structures and machining are back on track. According to business leaders, activity will increase slightly in December and recruitment will continue, but with the reserve linked to social movements.

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Food

Food and beverage manufacturing contracted overall in November. Businesses are affected by disruptions to deliveries and point-of-sale blockages. The decline in meat processing remains the sharpest. The notebooks appear more cramped, excluding the manufacture of beverages. The increase in much-anticipated production remains highly uncertain.

Production of electrical, electronic and computer equipment

The production segments of electrical, electronic, computer and other machinery equipment are taking a step forward in November. Electronic components are in short supply but do not affect production. High pressures on raw materials remain and partial impacts are felt on selling prices. Order books are still satisfactory, which should strengthen hiring for an upwardly anticipated increase in production.

Transport equipment

The manufacturing of transport equipment continues to recover, but at a slower pace than in previous months. The situation is disparate and remains worrying for some players in automotive suppliers (Information procedure consultation of employees of the Ford Aquitaine Industries plant). Shipbuilding remains strong and the aviation industry is on the rise. In the sense of order books, hiring is possible to ensure the increase in production.

Building and public works

For the building and public works sector, the recovery that began since the end of the year continues, but more markedly in the building sector (second work). There are persistent recruitment difficulties and especially in public works, skilled labour is in high demand. Order books are substantial and suggest an increase in activity in the next quarter.

The provision of services was detected in the Gironde economy but remains higher than in 2017

In November 2018, commercial services activity was particularly evident in car repair, road transport and catering. In particular, these sectors have been impacted by social movements. On the contrary, the order books of IT activities and information services and the temporary agencies are surely increasing. As a reminder, merchant services account for 18.6% of the total workforce.

INSEE forecasts growth of 1.5% in 2018 and 2019, despite consumer support. Social movements and the deteriorating business climate are impacting gross domestic product (GDP) growth at 0.2% in the last three months of the year. The companies must therefore be pragmatic about their choice of investments and hirings. However, Bordeaux remains an attractive city and remains the city in the region where the confidence index is the highest.

Kevin HEUGAS – BORDEAUX Business

Sources

https://bordeauxgironde.cci.fr/Votre-CCI/Suivre-nos-actions/Publications/Indicateurs-et-chiffres-cles/Barometre-de-l-Economie-Girondine-3eme-trimestre-2018

http://www.lefigaro.fr/conjoncture/2018/12/18/20002-20181218ARTFIG00243-croissance-chomage-2019-sous-le-signe-de-la-morosite-en-france.php

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