End of the “whatever the cost”: how are the main sectors of activity helped during the health crisis

“We are in the right direction”, rejoiced the Minister of the Economy Bruno Le Maire, Monday, August 30 at the microphone of France Inter. In this 2021 school year, the government is optimistic about France’s economic outlook. The executive expects growth of 6% in 2021 for the French economy. On the basis of these indicators, the government also announced the gradual end of the “whatever the cost”. In fact already started before the summer, by being confined to a smaller number of activity sectors, this withdrawal of public aid will take a new step on October 1 with the disappearance of the solidarity fund.

On the eve of this return to the deep end of unsupported activity, Franceinfo takes stock sector by sector on the impact of the pandemic, the aid received and the challenges to come.

In industry, automotive and aeronautics still at a standstill

During the crisis. “The manufacturing industry faces the worst crisis since the post-war period”, notes INSEE in a report published in July. In total, the added value (indicator which measures the wealth produced) of French industry fell by 12% in 2020. Automotive and aeronautics were the hardest hit with respectively –32% and –31%. activity.

Aid received. Companies in the industry have benefited from 790 million euros in solidarity funds and contracted 22 billion euros in loans guaranteed by the State. In April 2020, 1.2 million employees were on partial unemployment. They were only 180,000 last July. Two support plans, one of 8 billion euros for the automobile and the other of 15 billion for aeronautics, were implemented in 2020 by the government.

And now ? The year 2021 is an opportunity for a recovery for the agro-food industry as well as the production of manufactured goods and chemicals. “Despite the new confinements, the factories have not been closed. Without being able to go to restaurants or to the cinema, the French bought products for their homes. This has supported these branches of the industry”, explains to franceinfo Mathieu Plane, economist at the French Observatory of Economic Conditions (OFCE). On the other hand, the situation is quite different with the automobile and aeronautics industries, which are struggling to restart. “In the second quarter of 2021, the transport equipment production sector was still –26% compared to its pre-crisis level”, specifies Mathieu Plane.

Return to the list of activity sectors

In restaurants and hotels, reopening at all costs

During the crisis. Hotel and restaurant professionals have suffered greatly from health restrictions. In total, between March 2020 and June 2021, restaurants in mainland France were closed for 280 days. The hotels were not spared: they were only 60% to be open in the first quarter, according to an INSEE survey.

AIDS. Some 12 billion euros from the solidarity fund have been allocated to hotels and restaurants. Companies in the sector have contracted 10.8 billion euros in loans guaranteed by the State. In April 2020, more than 930,000 employees were declared partial unemployment. In July this number fell to 148,000, dropping below 200,000 for the first time since the start of the crisis.

And now ? “We are still recovering”, said Didier Chenet, president of the National Group of Independents of the Hotel and Restaurant Industry (GNI), on August 30 on franceinfo. At issue: the drop in tourist attendance this summer in metropolitan areas and the implementation of the health pass. Companies in the sector will be able to continue to claim the solidarity fund in September, provided they have achieved at least 15% of their turnover over the month. The government intends to push for the reopening. Another challenge: the workforce which is still lacking. “There is generally a shortage of employment in sectors such as tourism which have strong needs during the season”, explains to franceinfo Thierry Millon, of the firm Altares.

Return to the list of activity sectors

In retail, digital premium

During the crisis. Two weights, two measures. On the one hand, non-food retail businesses, also called “non-essential” during the pandemic, saw their activity fall by more than 9% in 2020 according to INSEE. On the other hand, online sales jumped nearly 6% in the same year.

AIDS. This sector has benefited from 4.6 billion euros from the solidarity fund. More than 33 billion euros in loans guaranteed by the State have been taken out. In April 2020, more than 1.5 million retail employees were on short-time work. They were down to 42,000 last July, dropping below 100,000 for the first time since October 2020.

And now ? “Trade is not doing too badly”, says economist Mathieu Plane to franceinfo. “Many players have adapted well. There has been an expansion of online commerce, which has benefited web players, but also a number of companies which have taken advantage of the pandemic to begin their digitalization”, specifies the researcher of the OFCE. Experts are counting on the significant savings made by households during the crisis to boost consumption, especially in the clothing sector.

Return to the list of activity sectors

In construction, in search of materials

During the crisis. Very affected during the first confinement with the total stoppage of construction sites, the construction sector was much less slowed down by the health measures. According to INSEE, the difference between the turnover observed from October to December 2020, compared to the expected results outside the crisis period, was only 6%.

AIDS. Construction companies have benefited from one billion euros from the solidarity fund and they have contracted nearly 12 billion euros in loans guaranteed by the State. More than a million employees in this sector were on short-time work in April 2020. They were only 6,000 in July 2021.

And now ? The construction sector is one of the major beneficiaries of the 100 billion euro stimulus plan announced by the government in September 2020. In this envelope, nearly 15 billion are devoted to the thermal renovation of buildings. But construction professionals are paying a heavy price for the soaring commodity prices following the restart of the global economy. As a result, the French Building Federation (FFB) estimates that 15% of companies were in difficulty in pursuing at least one project this summer.

Return to the list of activity sectors

In culture, tailor-made aid

During the crisis. Certain branches like books, have better endured the restrictions, after the first confinement, thanks to the passage of bookstores in the category of so-called essential shops, as noted by INSEE for Ile-de-France. On the contrary, live entertainment, music, cinema and museums have paid a heavy price for forced closures. Between spring 2020 and spring 2021, museums remained closed for 280 days and cinemas for 300 days.

AIDS. In all, 2.5 billion euros from the solidarity fund went to the cultural sector, which also contracted more than 2.4 billion euros in loans guaranteed by the state. A device known as “the white year” was set up to allow temporary workers at the end of their entitlement to continue to receive unemployment. In total, last July, the Minister of Culture, Roselyne Bachelot, amounted to 12 billion euros public support for culture.

And now ? The cultural sector has not yet recovered. “The level of activity is still very low compared to the pre-crisis”, notes economist Mathieu Plane to Franceinfo. The drop in attendance in cinemas after the entry into force of the health pass in August symbolizes these persistent difficulties. The government is committed to continuing aid for those involved in culture, but proceeding on a case-by-case basis. “We will be alongside sectors that are in difficulty, but things are very different depending on the sector, so we will be tailor-made”, said Roselyne Bachelot, on franceinfo, on August 30.

Return to the list of activity sectors

In transport, a lasting crisis

During the crisis. Airlines and travel agencies have been hit hard by travel restrictions and border closures put in place since the start of the pandemic. In total, the number of flights collapsed by 66% in 2020 compared to 2019, according to figures from the International Air Transport Association (Iata).

AIDS. Transport professionals have received 2.1 billion euros and contracted more than 9 billion euros in loans guaranteed by the State. More than 614,000 employees were in partial activity in April 2020. They were only 65,000 last July.

And now ? “The activity in transport is still very far from its pre-crisis level”, notes economist Mathieu Plane. And the horizon does not seem to want to emerge in the medium term. In a note on the effects of the crisis by 2022, INSEE classifies the branches of international tourism and business travel in the category of sectors “very affected by health restrictions […] and which could also be affected durably “. Changes in consumer behavior, such as the development of teleworking, could have a lasting effect on airline activity.

Return to the list of activity sectors

Leave a Reply

Your email address will not be published. Required fields are marked *