In 2023, France recorded a significant number of business failures linked to the poor economic situation. This could harm the first signs of reindustrialization observed in the country in recent years. The government is counting on public support measures to support the development of the industry and its decarbonization.
The numbers are in. In 2023, France recorded 57,729 new procedures linked to business failures, according to the latest barometer from the Altares firm. Over one year, the increase reached almost 36% and is certainly less strong than that of 2022, which had been an exceptional year (+49%), but nevertheless remains the second fastest in history. More worrying, the rate of new procedures does not seem to be slowing, since 16,820 files were opened in the last quarter, an increase of more than 37%, which corresponds to one of the worst figures in the last thirty years.
The industry seems to be holding up a little better, since new failure cases increased by a little more than 29% last year, thanks in particular to manufacturing activities (+ 23.6%). This sector, however, remains weakened by textile and clothing activities, which recorded an increase in new procedures of 41.5%. While the progression of failures in the sector agri-food is identical to the average for other sectors, we are witnessing a serious crisis in the processing and preservation of butcher’s meat, with the number of companies in difficulty at the highest level for at least ten years and increasing by 125 %. In construction, business failures are accelerating and account for 24% of bankruptcies alone.
Well beyond the post-Covid catch-up effects observed in 2022, these corporate defects are directly correlated to the particularly tense economic environment with which they must face. A situation, confirmed by the analysis of Thierry Millon, director of studies for the Altares company: “activity at half mast, inflation level still high, interest rates still high, consumption faltering, form a dangerous cocktail for companies with depleted cash flow after a succession of crises. Even the biggest players are not spared, potentially transferring the risque towards their suppliers and subcontractors. 171 companies with at least 100 employees failed in 2023, this is 80% more than in 2022 and the highest number since 2014 (185 defaults). »
These poor figures could harm the timid phase of reindustrialization observed in France in recent years. While the share of French industry in GDP reached 19% at the start of the 1970s, this level has continued to fall for almost fifty years, reaching 9% in 2022, according to figures from Bpifrance. “However, we must wait until 2022 to observe a real evolution in French relocation and reindustrialization, which began in 2017,” analyzes the public bank. A trend confirmed by the Trendeo firm, which recorded 300 net creations of factories over the period 2017-2022, while 600 net disappearances were recorded after the financial crisis, between 2008 and 2016.
France 2030: still around thirty billion to spend
However, it is too early to say that the difficult economic situation that France is going through will stop the reindustrialization dynamic. Especially since this dynamic should continue to be driven by the France 2030 investment plan, which represents the main instrument for the development of the country’s industry, with a budget of 54 billion over 5 years. The objective is to finance ten innovative sectors, and in 2 years, around 25 billion have already been spent. Around thirty billion will therefore still fuel the economy over 3 years, an envelope to which must be added the leverage effect, that is to say the knock-on effect oninvestment private, generally estimated at 1.6 times the public amount.
The other issue is also that of the decarbonization of industry. Half of the funds from the France 2030 plan are intended for the country’s ecological and energy transition. Last October, to give a boost to reindustrialization, a “green industry” law was promulgated and aims, among other things, to facilitate the establishment in France of environmentally virtuous industries and to make France the leader in green industry in Europe. Having just been appointed Prime Minister, Gabriel Attal announced his intention to table a second “green industry” bill, one of the axes of which would be to support projects of national scope.
With this proactive policy, the government hopes to increase the share of industry in the economy to 15% of French GDP by 2027. An ambitious objective, but one of the obstacles to reindustrialization may not be economic and be at the level of the lack of SKILLS necessary for industrial development. “In the next ten years, we will need to recruit more than a million people because we are reindustrializing and because we will have to replace many people who are retiring”, declared Roland Lescure, Minister Delegate in charge of Industry. Between 2017 and 2022, the number of vacant industrial jobs tripled, from around 20,000 to 60,000.