Why the international crisis is hurting the morale of Aveyron’s business leaders

CCI surveyed the morale of its business leaders. And while during Covid the situation was always under control, this time the consequences of the Ukrainian crisis and in particular the rising cost of energy are seriously worrying the bosses.

Aveyron companies weathered the health crisis well. The period, after the first months of uncertainty, was even for many an opportunity to launch new development projects. But it seems that in this spring of 2022, the many uncertainties (war in Ukraine, energy crisis, etc.) have taken a toll on the morale of Aveyron’s business leaders.

They are regularly surveyed by the Aveyron Chamber of Commerce and Industry to establish a barometer of their state of mind. And according to the spring survey carried out by the chamber services, Aveyron’s bosses are starting to worry. According to Aveyron business leaders who responded to the survey, their revenue in recent months has increased by just 15%. 49%, on the other hand, saw their activity decrease. The rest is in line with last year’s results. 33% believe their order backlog is satisfactory (27% believe not).

Concerns among traders

Even more concerning, only 27% of entrepreneurs who responded now view the future of their business in an optimistic light (compared to 26% of pessimists). This trend is much stronger in the retail sector and, to a lesser extent, in cafes, hotels and restaurants, which still see the tourist season arriving with very favorable indicators, since reservation rates are quite high and the international context is once again driving tourists to vacation in France. However, this good news is offset by significant recruitment concerns.

Marked deterioration of the box

What is the impact of rising raw material costs? This rise in prices, linked in particular to the energy crisis resulting from the war in Ukraine, has important consequences. According to a survey conducted by CCI Occitanie, 92% of respondents in Aveyron stated last April that they felt an impact related to the increase in the cost of energy in their activity. Above all, more than a third of employers fear, if the situation continues, that their activity will be threatened. Indeed, in a period when purchasing power is a major concern for households, it is not necessarily easy to pass on. The most impacted sector is construction, which also has to deal with the scarcity of raw materials, which also impacts on costs. It should be noted that the situation is also perceived very negatively by the hotel, cafeteria and restaurant sector because this energy problem comes on top of activities already greatly weakened by the health crisis.

The main consequences felt from the increase in energy costs in Aveyron: deterioration in cash flow (67% of respondents), reorganization of activity (19% of respondents), higher prices (8% of respondents), lower margins (7 % of respondents). “It’s worrying, confirms Dominique Costes, president of the CCI. With the regional chamber, we had consulted the bosses in January, 92% were optimistic. Three months later, that number dropped 50 points. We can’t control anything. Not even energy prices, neither raw materials nor delivery times. With Covid, we were able to control ourselves and protect ourselves. When you add in recruitment concerns, inflation issues and loss of purchasing power, that’s a lot. Overall, I have great fears for the coming months and even more towards the end of the year.”

Aveyron withstood Covid quite well. The exit from the crisis had been predicted very quickly. But two years later, the context appears to be seriously darkening.

impacted exports

According to customs data in 2021, 1.5 million euros of products were imported into Aveyron from the zone of Russia, Belarus, Ukraine, i.e. 0.18% of Aveyron imports. These are mainly precious metals and other non-ferrous metals, wood and wooden articles, general-purpose machinery and equipment. On the other hand, with a positive trade balance, 9.2 million euros of Aveyron products were exported last year to the areas of Russia, Belarus and Ukraine. This represents 1% of Aveyron’s exports.

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