The BPCE banking group on Thursday put the number of jobs threatened by business failures in France at 240,000 in 2023, a record for at least seven years. If the number of business failures has returned to its pre-Covid levels (56,601), their increase is notable for small and medium-sized businesses, with a much greater impact on employment than in previous years. “2023 has been extremely complicated for SMEs and mid-sized companies” summarized Julien Laugier, economist at BPCE, the joint body of the Banque Populaire and the Caisse d’Epargne. With the result that around 240,000 jobs are threatened by these failures, a third more than in 2019 and a level not seen since at least 2016, the date on which BPCE established its calculation methodology, based on data from commercial courts.
To explain this increase, the banking group first puts forward a catch-up effect of the Covid years, during which strong state aid paradoxically allowed a much lower level of failure than in previous years. Other cyclical factors could have played a role: “almost sluggish activity for around a year”, an increase in the cost of financing companies due to the rise in interest rates and pressure on the margins of the smallest companies.
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For 2024, BPCE economists do not predict a “disaster scenario”, but an increasing number of failures, to 62,000, around the average for the years 2010-2015. “Thanks to the slowdown in inflation, we should see a more significant increase in consumption which should benefit small and medium-sized businesses,” estimated Alain Tourdjman, director of economic studies at BPCE. However, around 250,000 jobs will be threatened, he estimated. Above all, certain sectors could particularly suffer, such as real estate and construction, weakened by the maintenance of interest rates at a high level.
The erosion of margins could also be difficult for the catering and business services sector. On the other hand, the decline in inflation should benefit the retail sector, the agri-food sector and, to a lesser extent, personal services, estimate BPCE economists.
