22 October 2020

2020- n° 270

In October 2020, the business climate has sharply deteriorated in services Monthly survey of services - October 2020

According to the business managers surveyed in October 2020, the business climate in services has sharply deteriorated, putting a halt to the rebound started in May. At 89, the business climate composite indicator has lost 5 points this month and stands far below its long-term average (100).

In October 2020, the balance of opinion on the general outlook of the sector activity has fallen again. It therefore remains significantly below its average level. Business leaders are much more pessimistic than in the previous month about their own prospects for the next three months: the balances on expected activity and expected demand have plunged and moved further away from their average. However, the business leaders have generally reported that their past turnover increased over the past three months: the corresponding balance of opinion has continued to rebound and exceeds its long-term average. Similarly, the balance on past prices has continued to rise and exceeds its average level, while the balance on expected selling prices has fallen sharply this month and has moved away from its average.

Concerning employment, the balance of opinion on the workforce size for the last three months has slightly increased but remains below its average. The one on expected workforce size has declined well below its own average. Slightly more business leaders than in July have reported difficulties in recruitment but this proportion remains below this average level.

The balances of opinion on investment, past and expected, have edged down this month, thus remaining below their average. As in July, the business leaders have reported more often difficulties related to demand than to supply.

In October, the business sentiment has sharply deteriorated in the sub-sector of of accommodation and food services, in connexion with the strengthening of health containment measures. At 79, the business climate has lost 10 points and stands far below its average. The main balances of opinion have fallen, particularly those on the short-term activity and demand prospects.

In the sub-sectors of road freight transport, real estate activities, and administrative and support service activities, the business climate has sharply deteriorated in October and has moved away from its long-term average. Activity prospects, both general and individual, as well as demand for the next three months have been assessed more unfavourably than in September.

In professional, scientific and technical activities, the business climate indicator has slightly fallen back and remains below its average level.

The business climate has slightly improved only in information and communication, while remaining well below its long-term average.

The business climate in September 2020 has been revised downwards by one point due to the inclusion of late responses from businesses.