The third quarter is always marked by inflation. If economic activity is still slowing down, trade is on the rise, explains the latest IEDOM analysis.
Written by NP – Friday December 15, 2023 at 8:08 a.m.
The IEDOM publishes the Economic Trends relating to the third quarter of 2023. The business climate is improving modestly in Reunion, against a backdrop of slowdown in activity. The business climate indicator (ICA) increased by 1.2 points to 102.7 and remains close to its long-term average (100). The cash flow level in the 3rd quarter is more favorable. Business investment prospects are recovering. Activity is nevertheless weakening and the rise in input prices is still weighing on operating costs for all sectors.
Household consumption is running out of steam
Cumulatively over the quarter and in amount, payments by credit card fell by 6.3% compared to the same period the previous year (-2.7 over the 1st quarter). Inflation persists (3.3% year-on-year at the end of September) and weighs on purchasing power. Labor market conditions remain stable this quarter. Between the 2nd and 3rd quarters, the number of job seekers registered with Pôle emploi in category A is almost unchanged (-0.1%) and reached 117,340.
Companies are a little more optimistic about their investment prospects. Trade rebounded in the 3rd quarter (+2.2% of imports compared to the 2nd quarter) but remained in decline over the year.
The drop in activity also affects the market services sector
Activity is deteriorating for the majority of sectors, including the market services sector which had held up well until the start of the year. Activity in the tourism sector is now stabilizing (-3.5% number of nights over the quarter), after a year of post-covid recovery. Regarding the construction sector, activity continues to deteriorate at a rate close to the previous quarter. Only companies in the trade and agricultural sectors remain optimistic about their business volume.
Companies are pessimistic for the 4th quarter
For the coming quarter, business leaders continue to be pessimistic regarding activity. Operating costs and payment terms are expected to deteriorate. The cash level is expected to fall
2023-12-15 04:16:07
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