Lack of visibility on energy prices, companies will invest less

As winter approaches, it is not the prospects of a global recession, accompanied by high inflation, or the relative deterioration of their cash flow and their order book that are of most concern to business leaders. . No, it’s more the explosion of the energy bill and the way in which they will be able to deal with it, as confirmed by the Bpifrance/Rexecode barometer, published on Wednesday 16 November.

When asked whether they will be able to maintain their production while reducing their energy consumption, 38% of business leaders for whom gas is the main source of energy answer in the negative. In other words, if they cannot afford the price increases, they will have to produce less.

The proportion is almost the same for oil users (35%). But it drops to 22% for those who mainly use electricity. As for the room for maneuver of companies that can consume less, it remains low: very few VSEs and SMEs think they can reach the threshold of 10% reduction in energy consumption without impacting their activity. And one in four business leaders today say they are unable to say how they will adapt.

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This situation has an immediate impact: “As long as they have no visibility on the price of energy, business leaders choose to postpone investments”, explains Philippe Mutricy, Director of Studies at Bpifrance. Despite financing conditions which remain favorable, according to the barometer, fewer than one business leader has now invested or intends to do so in 2022, ten points less than at the start of the year.

Reassuring indices on inflation

The impact of this slowdown remains to be put into perspective: it follows two years of strong investment, with companies taking advantage of their increased cash flow to finance equipment or transformation projects, for example in the digital sector.

“Investment has grown twice as fast as GDP since the health crisis”, recalls Baptiste Thornary, chief economist of Bpifrance. The loss of investment intentions can also be explained by the deterioration in cash flow, which affects one in three companies, but which must also be put into perspective: it rather corresponds to a return to normal after the Covid crisis. Moreover, business failures, if they gradually catch up with their long-term level, remain contained: with 38,525 procedures recorded between November 2021 and October 2022, according to figures published on Wednesday November 16 by the Banque de France, we remain still nearly 25% below the 2019 level of insolvencies.

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