business leaders have the blues

Business leaders feel squeezed and suffer from a feeling of being downgraded, this is what reveals a study by the CPME, the employers’ organization which represents small and medium-sized businesses.

According to a study by the CPME (Confederation of SMEs), business leaders do not have morale because activity is declining. They are taking fewer orders and are scrambling to try to get or even keep contracts.

For 47% of craftsmen and small business owners, this reduction in their turnover is their main concern today, whereas just a few months ago, their first concern was finding labor. Times have changed: almost one in two business leaders now expect a sharp drop in their activity next year

Costs rise, margins fall

The reasons are multiple. First of all, the slowdown in global growth is weighing on the economy, with the recession in Germany, the drop in activity in China, it is a tense international environment. Then, production costs remain very high, because energy prices are high. Wages have also increased, notably the minimum wage, and are widening the accounts. And business leaders have the feeling of being squeezed, because on the other hand, with inflation, customers are asking them to lower their prices and therefore review their margins.

Finally, they are having more difficulty than before in obtaining financing from banks. Three quarters of the bosses questioned say that the conditions of access to credit have tightened. After whatever it costs, they are now required to repay the loans…

A deeper unease

Yet the State continues to support them, even if it is less than before. The bosses have the feeling that the government is letting them down. It is true that, as it needs money, the executive has tightened the conditions for granting partial unemployment, spread the reduction in production taxes over several years, increased this summer the cost of the charges which weigh on ruptures conventional etc. To restore morale, business would have to pick up again. But it is not sure that this is enough because what also appears implicitly is that the unease is deep.

Today, business leaders suffer from a feeling of being downgraded. A bit like teachers, they have the impression of no longer being respected, of no longer having authority. For example, if they make a remark to an employee, they fear sick leave. Many also complain of no longer doing their core business, of being forced to fill out paperwork for social or environmental standards. The government promises them a major simplification project, but they only half believe it because to hear them, this promise has already been made, without it really changing.