Economy: Half a ton into the new year in Corsica
In the service market, activity in industry is slowing down, construction and public works companies are nearing the end of ongoing construction sites. The good news comes from raw materials, which are less and less the subject of intense negotiations.
With the end of 2022, two thousand and twenty-three starts in Corsica, a little slower than the previous weeks in the economic context.
This is one of the main lessons from the monthly business survey conducted by the Banque de France in Corsica from December 22 to January 6 among the island’s business leaders representing the three main economic sectors: industry, market services and construction.
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At the beginning of the year, island activity is showing signs of slowing down. Starting with industrial production “marks time and more in the beverages or processed dry goods sectors”, we observe from the financial institution. The evolution corresponds to transient threats and the cyclical mode of operation of the respective sector. The accepted scenario excludes a major recession and unpleasant surprises in favor“maintenance suspension” and takes leave. At the same time, “severe stress on packaging supply” drinks companies penalize. As for this last point, “Manufacturing is in very sharp decline. The less refined and refined products sector shows a downwardly revised production rate,” thus interrupting the growth cycle before resuming activity. A gradual recovery is expected in the short term.
Optimism about transport equipment is more measured. The sector, which works at a low speed, should start to rise again sooner or later, unless there is a crisis in the professions. “If visibility in terms of activity in 2023 is not challenged by 15% production growth, recruitment challenges will continue and force managers to reorganize production”, emphasizes the Bank of France. Meanwhile, one “moderate slowdown in activity” approaching.
The idea of growth, on the other hand, comes from higher value-added industries such as carpentry and metallurgy. In this regard, observers trust “Upward movement in production to be confirmed in the medium term”. It will then remain to assess the consequences of the energy price hike.
Repair
Trade sectors are also more gloomy than last fall. This phenomenon corresponds to a seasonal problem. The last tourists left in November, and many pubs and restaurateurs chose to close the curtain until next spring. A change in tone can also be observed in the car rental sector, “timekeeping activity”, like car maintenance in general. In addition, the volume of cargo is reduced with the level of eroding operations. In addition, at this stage of the year, the level of uncertainty regarding the 2023 season remains high. The energy issue, which is crucial according to the interviewed experts, remains unresolved. Future energy cost increases will depend on government decisions, which mechanically affect sales prices.
On the contrary, other parts of merchant services, consulting, engineering and cleaning operations continue to grow. Unless there are recruitment challenges, they will remain dynamic. Observers are sure that the favorable trend will not be denied in the coming weeks.
Apart from that, defects are also evident in construction and public works. And this time, it is the decline in both public and private orders that could turn the lights red. Companies can no longer rest on their laurels. “As expected, production projects are moving forward to finalize. The order book is still considered well below the balance threshold. In this context of uncertainty, professionals are only waiting for the ‘stabilization of activity’,” we provide.
While energy prudence strengthens the production process, the latter has developed a specific strategy. “Incentives for renovations, especially in terms of energy storage or insulation, allow us to look forward to the coming months with more confidence,” This was reported by the Bank of France. The good news is that now, except for steel and aluminum, raw materials are trading at lower prices, which may bode well for a better future.
With the continuation of the war in Ukraine, the weight of inflation and many tensions and social conflicts, there are so many trajectories that could be affected, with pension reform in the background.
