- Based on more than 10,000 data sources, the Boston consulting group has created an index allowing to know the economic trends in this period of crisis.
- In general, all the economies of the world reacted in the same way to the health crisis.
- But according to Sylvain Duranton, world director of BCG Gamma, the economic recovery in France is stronger than among our European neighbors.
"A crisis like no other ..." According to forecasts from the International Monetary Fund published on Wednesday, the world's gross domestic product (GDP) will drop by 4.9% in 2020. But with the deconfinement, the economy is recovering slowly and all the actors are not housed in the same boat.
To realize this, the Boston Consulting Group (BCG) publishes, this Friday, its first "Barometer of recovery" *, which establishes the economic trends of the moment. Based on an index 100, which represents the economic situation in January 2020, it is possible to compare trends and define the dynamics sector by sector, or country by country.
Transport and logistics suffered
"Even financial institutions have been affected," said Sylvain Duranton, World Director of BCG Gamma. If one sector has been hit hard by the crisis, it is transport-logistics. Containment, applied in many countries, limited intra- and international trade, which collapsed dramatically. It was especially in Europe that the loss was the heaviest (- 25 points compared to the base 100) for this sector. Obviously, the countries most affected by the virus (France, Italy, Spain, Germany and the United Kingdom) are those who "contributed" to this fall. But due to globalization, transport has not been spared in the rest of the world either, since activity has dropped by 20 points on average over this period.
The automobile, which has moved out of consumer purchasing priorities in times of crisis, saw its figures drop, on average, by 10 points worldwide between January and June, driven by the decline in European markets (- 20 points) and Brazilian (- 25 points).
Similarly, the retail sector pays for the closure of so-called “non-essential” businesses in confined countries (- 20 points).
Conversely, and a logical consequence of a crisis like that of Covid-19, the health sector is gaining an average of 5 points worldwide, and this should be confirmed in view of the situation in the United States and in Brazil, two giants that have become the epicenters of the epidemic. The 10-point increase in Europe in the health sector is partly driven by France (+12 points).
France not spared…
Moreover, in France, the curve of the different sectors follows the stages of the crisis. From January 15 to the beginning of March, the sectors were stable before sinking when the containment was announced. Transport and logistics are the biggest victims, with a descent of up to 50 points (still compared to base 100) at the beginning of May. The sector is still struggling to recover, with a score of only 60 points on the index on June 15. Transport, which depends particularly on the good health of the economy, will have to wait a little longer to regain its form at the start of the year. Same observation for the automobile, like Renault, which knew the depths before slowly going back to an index of 81.
Aeronautics and defense suffered significant losses and are still stagnating at an index of 79. The difficulties of the Airbus group are a symbol of this.
Other sectors save furniture with only a few lost index points, such as financial institutions (95 points), energy and technology and telecommunications (90 points each).
… But European champion of (shy) revival
In light of these indices, it is possible to compare the French figures with those of our European neighbors, who were affected approximately at the same period. For this, the BCG established two specific indices on the same basis. The first concerns businesses. We can see that between January and mid-April, French companies were the most impacted by the crisis, with 22 points lost on average against 19 for companies in the United Kingdom and 18 for German and Italian. However, it was also in France that the recovery was strongest, with 6 points regained since mid-April, as in the United Kingdom. It is more than Germany (4 points) and Italy (3 points). To sum up, if French companies are the ones that have lost the most among the 4 major European economies, they are also the ones that are leaving the best.
The same trend is also found in the second index proposed by the BCG study, that of consumers. It establishes that French consumers lost 54 index points between the start of the year and April 15. It is roughly the same figure as the Italians (56) but much more than the English (45) and especially the Germans (30).
But like their businesses, the consumption of individuals has increased by 41 points. The French, who have lost “only” 13 index points since January, are doing better than their neighbors, with the exception of the Germans (8 points). Sylvain Duranton also encourages "to blow on the embers of the French recovery".
Political management of the health crisis influences economic dynamics
If Europe has been the hardest hit economically yet, the crisis has spared no one. "It is interesting to see how the policies applied influence the dynamics", explains Sylvain Duranton. At the origin of the pandemic, China was affected from the beginning of the year and in a very violent way, especially on transport and the automobile, which are the basis of its economy. Today, almost all the figures have returned to their nominal index: "For a country with such growth, it is a loss, but it is a very rapid recovery", analyzes Sylvain Duranton.
Conversely, the Japanese neighbor took advantage of its very cautious management with semi-containment, and saw its economy sag slowly before stabilizing. For their part, the United States and Brazil are currently on a downward slope, and it will take some time before seeing a real recovery.
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* The Barometer is established from 10,000 data sources, such as state growth, employment trends, stock market values but also the rate of withdrawal from the distributor of consumers.
- Transport
- Automobile
- Economy
- Germany
- Brazil
- United States
- Covid 19
- Deconfinement
- Coronavirus