Business leaders across France are slightly less optimistic about the economy than they were a year ago, according to our 2023 Business Leaders Outlook survey. Nearly three in five (58%) have a positive outlook about the global economy; last year, 62% were optimistic.
Optimism around the national economy has fallen as well—to 56% from 60% last year. Notably, 53% of business leaders in France said they expect a recession in 2023. Compared with other countries surveyed at the same time, French leaders are less worried about a recession than their counterparts in the United Kingdom (69%), the United States (65%), India (61%) and Germany (59%), but more concerned than leaders in Australia (46%).
Inflation and increased energy costs continue to weigh on French businesses. And supply chain pressures haven’t eased either: 63% said it has gotten worse over the past 12 months to source materials and ship goods.
Despite these challenges, many leaders are still confident in their own companies. Nearly nine in 10 (89%) expect their revenues to increase or remain the same in 2023.
Economic outlook and expectations
Slightly more than half of French business leaders are optimistic about the global, national and regional economies. But their optimism is much stronger for their own industries and companies.
Economic outlook for 2023
Global economy: Optimistic 58%; Neutral 13%; Pessimistic 29%
National economy: Optimistic 56%; Neutral 13%; Pessimistic 31%
Local economy: Optimistic 55%; Neutral 25%; Pessimistic 20%
Industry performance: Optimistic 74%; Neutral 17%; Pessimistic 9%
Company performance: Optimistic 75%; Neutral 19%; Pessimistic 6%
Optimism dips slightly
The drop in optimism has been subtle. A year ago, three-fifths (60%) of business leaders were optimistic about the national economy. Today, 56% have a positive outlook.
National economy optimism
2022: 60%
2023: 56%
Bullish on their own businesses
The vast majority of businesses (89%) expect their revenues to grow or hold steady in 2023. A similar amount (88%) expect their capital expenditures to increase or remain the same.
Business expectations
Revenue/sales: Increase 68%; Remain the same 21%; Decrease 11%
Profits: Increase 61%; Remain the same 24%; Decrease 14%
Capital expenditures: Increase 60%; Remain the same 28%; Decrease 12%
Capital needs: Increase 55%; Remain the same 34%; Decrease 11%
Election effects
Business leaders generally don’t expect many changes due to recent elections.
Sentiment following the 2022 elections
Climate change concerns: Worse 25%; Same 41%; Better 34%
Inflation: Worse 35%; Same 33%; Better 31%
Regulatory environment: Worse 14%; Same 58%; Better 28%
Trade policy: Worse 13%; Same 57%; Better 31%
Corporate taxes: Worse 16%; Same 53%; Better 31%
Infrastructure: Worse 9%; Same 57%; Better 33%
Government favourability toward businesses: Worse 14%; Same 56%; Better 30%
Business challenges
French business leaders face a range of challenges today. Among them: persistent inflation, high energy prices, snarled supply chains and a shortage of available workers.
Top ways companies are adapting to inflation*
Raising prices: 50%
Automating processes: 34%
Prioritising most profitable products: 31%
Making changes to purchasing: 31%
Watching change in relative prices: 30%
Strategic stockpiling: 28%
*Among respondents who indicated they are experiencing inflation.
What’s driving up the cost of doing business*
Raw materials: 67%
Energy prices: 62%
Supply chain: 53%
*Among respondents who indicated they are experiencing inflation.
Top responses to the labour shortage*
Increase wages and/or benefits: 46%
Provide flexible work location: 43%
Invest in automation: 43%
Offer flexible hours: 42%
Offer upskilling/training: 40%
*Among respondents who indicated they are planning to increase staff or maintain their current headcount.
Top external business threats
Energy prices: 33%
Cost of debt/access to capital: 17%
Competition: 11%
Cybersecurity and fraud: 10%
General market volatility: 10%
Local currency volatility: 9%
69% are considering investing in renewable sources of energy as a result of rising energy prices*
*Among respondents who listed energy prices as their top external threat
*Among respondents who listed energy prices as their top external threat
Cyberattacks experienced in last 6 months
Malware (including ransomware): 35%
Security of data/integrity concerns: 33%
Data breach: 32%
Crashing of company’s online services or site: 32%
Business email compromise: 26%
Social responsibility
Top areas of focus within corporate responsibility: Governance 38%; Social factors 47%; Environmental factors 54%
Top objectives motivating corporate responsibility*
Establish/reinforce company’s position in community: 44%
Enhance marketing and find new customers: 43%
Improve employee retention: 39%
*Among respondents who indicated they plan to focus on an area of corporate responsibility in 2023.
Business transitions and growth plans
Plans for business transfer
Yes, full transfer: 22%
Yes, partial transfer: 36%
Timeline to transfer business*
Within the next two years: 67%
Two or more years from now: 33%
*Among respondents who indicated they have a full or partial business transfer plan in place.
Growth strategies for the next 12 months
Expand into new domestic markets: 46%
Expand into new international markets: 42%
Focus on most profitable products: 40%
Expand into new distribution channels: 34%
Introduce new products/services: 32%
About the survey
Started in 2022, the J.P. Morgan Business Leaders Outlook: France survey is a snapshot capturing the concerns and expectations of senior business leaders whose companies have annual revenues between €20 million and €2 billion.
This year, 254 respondents completed the online survey between 21 November and 8 December, 2022. Results are within statistical parameters for validity; the error rate is plus or minus 6.2% at the 95% confidence interval.
Who took the survey
CFO: 50%
Other C-level: 24%
Owner/founder: 15%
CEO/chairman/chairwoman: 10%
Company size by number of employees
1-49: 2%
50-99: 6%
100-249: 20%
250-499: 24%
500-999: 22%
1,000-4,999: 21%
5,000+: 7%
Company size by annual revenue
€20 mm-€100mm: 57%
€101mm-€499mm: 22%
€500mm-€1b: 14%
€1b-€2b: 6%
Company by industry
Government: 4%; healthcare: 6%; home services: 4%; industrials: 7%; manufacturing: 24%; media/entertainment/advertising: 2%; nonprofit: 1%; oil and gas: 2%; other professional/non-finance: 3%; real estate: 2%; restaurants/food services: 3%; technology: 17%; transportation/logistics: 9%; wholesale/retail: 12%; other: 4%
Note: Some numbers may not equal 100% due to rounding.
Contributors
Kyril Courboin
Head of France, Senior Country Officer J.P. Morgan
Olivier Simon
Head of Commercial Banking, France and Benelux J.P. Morgan
Arthur Brunschwig
Head of Commercial Banking, Treasury Management, France J.P. Morgan
Pierre Maman
Vice Chairman, Head of Debt Financing, EMEA, Commercial Banking J.P. Morgan
Maja Torun
Head of Investment Banking, France J.P. Morgan
Annabelle Azoulay
Head of Private Banking, France J.P. Morgan
Vincent Juvyns
Global Market Strategist, Benelux, France and Geneva, Asset Management J.P. Morgan
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content.
