French economic recovery boosts US investor morale

The clouds over the French economy are gradually dissipating. After two painful years, the indicators turn green one by one. As pollution slows and growth recovers to 7% in 2021, U.S. investor morale has skyrocketed, according to the latest barometer released on Wednesday, February 16. Am Cham (English)American Chamber of Commerce in France) and the consulting firm Bain & Company. 74% of respondents say that the economic situation in their sector of activity will be positive in the next two years, compared to 39% in 2020 and 41% in 2019.. On the other hand, only 4% of them say that the economic situation will be negative against 5% in 2020 and 11% in 2019. Finally, 22% expect a stable economic situation.

“2020 was a disastrous year. Morale has dropped significantly. A year later, US investors have a huge boost in confidence.” said Marc-André Camel, partner and director of Bain & Company and vice president of AmCham France.

“This is due to the resilience of the French economy and a strong recovery in economic growth.” he explained at a press briefing, recalling that “American companies are the first investors and the first foreign employers in France.” Despite renewed optimism, most forecasting institutions have revised their growth figures for the first half of the year downward. The Omicron wave and the infection peaks of the past few weeks have weakened certain sectors of activity that were already suffering. And price pressure worries 56% of surveyed investors.

INSEE expects inflation to be between 3% and 3.5% by the end of June.

Nearly half of investors expect to be hired

As far as employment is concerned, the morale of American investors based on French soil is in good shape. Thus, almost half of the respondents say that the number of employees of their company in France will increase in the coming years. This is 24 percentage points more than in 2020. In 2019, this figure returns to pre-crisis levels.

Conversely, 7% indicate that the workforce will shrink in the next two to three years. This is 21 points less than in 2020. Finally, 42% of respondents say the payroll will remain stable in the near term, compared to 45% in 2020. “there are still restructurings” shade of Marc-André Camel. Recruitment tensions could also intensify, the Chamber of Commerce warns. “This is a global phenomenon, France is not spared. Among employees, there is a clear search for meaning in work. adds Bijan Egbal, president of AmCham France.

Strengths of France in 2022

Among the criteria that American investors cite for making a decision, they primarily highlight the economic context (79%), legal certainty (70%), socio-political climate (83%), job qualifications (74%). or availability of labor force (68%). “Respondents also note the importance of the size of the French market” adds Marc-André Camel.

Among the factors that are of little importance in terms of the investment decision is the cultural environment. A third of the respondents explain that this factor is not significant. Even more surprisingly, 25% of investors say that energy supply and energy cost are not important criteria for making an investment decision. Finally, quality of life is also one of the least frequently mentioned criteria. Every fifth respondent says that it does not matter when making an investment decision.

Life in France according to foreign workers

As part of this survey, the consular organization also asked foreign employees about the strengths and weaknesses of France in terms of attractiveness. Among the positive aspects, 89% of respondents note the quality of life and local culture. This is followed by the availability of medical services (88%) and the quality of transport and communication infrastructure (79%). Conversely, personal taxation (77%), social climate (62%) and housing (40%) are cited as the top three negative factors.

In terms of business, innovation is often cited as France’s asset (82% of respondents), thanks in part to a quality workforce (engineers, developers) or government support for the new economy. On the other hand, 48% of people report that the French legal framework is a weak point in terms of innovation and digitalization.

Presidential: moderate impact on investment decisions

Less than 200 days before the first round of the presidential election, the election campaign is barely gaining momentum. The eruption of the Omicron variant at the end of 2021 and tensions in the healthcare system have forced a large portion of the candidates to rethink their battle plan to advance their program. In terms of investment, the presidential election appears to have had little effect on the investment strategies of US companies.

Indeed, 63% of investors say that the results of this election will not affect these kinds of decisions. Conversely, 37% believe that the results of this vote may influence the decisions of parent companies. Asked about it Gallery, Marc-André Camel remembers “that there is a real gap between the election results and the decision to invest. France has retained legal certainty and predictability. That’s what really matters.”

Methodology: The survey was conducted between December 2021 and January 2022 by surveying the heads of subsidiaries of US companies in France. 121 responses were collected from US companies.