The French hoarded 4 billion more than in 2019 between March and June (Source: BPCE) - Reiseblogger

  • Despite the desire of economic players to revive consumption to save businesses, French households are moderating their consumption expenditure.
  • According to Pascale Hébel, this trend should continue given the uncertainties of the economic situation.
  • As a direct consequence, the savings of French households exploded and reached historic figures.

Some predicted the rush to stores and a vengeful spending spree after the frustration of containment, it is not. The sales, quite gloomy, which have just ended are proof of this: the French are not in a hurry to consume. According to figures released by INSEE, household consumption expenditure increased by 2.3% in June compared to February. Positive figures but which reflect more of a return to normal after the sharp decline observed between February and May (-7.5%). If some economists and the government want to see consumption jump to revive the economy, the French do not seem to hear it that way.

Consumption does not pick up as strongly as hoped

“Consumption in June is on a similar basis to 2019,” explains Pascale Hébel, director of the consumption and business division at Crédoc. According to the expert, if consumption did rebound in June after a surge in May (+ 37% compared to April), this is due to the need to consume, "to let go", according to Pascale Hébel, and especially the savings accumulated during confinement (from 75 to 100 billion according to estimates). The specialist prefers to compare the figures with those of last year: “Compared to June 2019, it is only 1.3% more, nothing extraordinary. "

However, some sectors are doing better than others, such as the automotive industry, which benefited from the conversion bonus. But also equipment goods, the French were able to realize some shortages at home during confinement. On the other hand, clothing continued its decline (+ 1.8% in June but -9.4 over the quarter). Pascal Hébel underlines that this fall is more of a long-term trend than a consequence of the crisis: “It has been about 10 years since textiles, and sales with them, have stopped working. This sector is particularly affected by the opportunity. "For this expert, the shift in sales, requested by traders, did not encourage spending:" They arrived too late, the clientele of the cities had already gone on vacation. "

The trend should last

But can this moderate consumption start again at the start of the school year? Little luck according to Pascale Hébel. First reason given, the loss of purchasing power of part of the French, and on the front line young people: "Those who have the means today, the richest, are those who tend towards more responsible consumption, stronger ecological awareness. According to her, populations with the lowest incomes and who have a greater propensity to consume have lost purchasing power during confinement. From -1 to -1.5%, not a hecatomb therefore, but enough to suggest that a few cubs should grow in the pockets of the French. Moreover, the fear of an increase in unemployment (Credoc estimates the rate to reach 12% by the end of the year) does not encourage investment. Conversely, the French tend more and more to save.

Precautionary savings rather than forced savings

If consumption is struggling to revive, it is also because the French are saving. And not just a little. According to the BPCE banking group, savings would even reach record levels in France. The average household savings rate (all income not consumed after payment of taxes), which has been rising around 14% for a few years, has jumped dramatically since the start of confinement. If it had risen to 19.8% in the first quarter according to BPCE, it exploded to reach 28% in the second quarter. Confinement requires, households could not consume as usual. But this trend should not weaken, according to the banking group, since forecasts announce an average for 2020 of 22%, a height that should be maintained in 2021.

If this saving was "forced" during confinement, it is maintained by choice of households. First, because it enabled a number of them to get out of debt. Secondly, because the French have looked to the future. Alain Tourdjman, director of economic studies at BPCE, explains: “Savings are now granted because households think it reasonable to consume less. "And if the French have switched to" precautionary "savings, it is largely because of the uncertainty that arises from a possible economic crisis to come. "The rise in unemployment to come jeopardizes the prospects for improving their future financial situation," says Alain Tourdjman. The economist adds that this deliberate saving is not only due to short-term risks but also in the medium term: “Households feel that they do not have enough savings to cope with aging and social protection. which could deteriorate. They want to secure their situation in the longer term. "

Savings made it possible to finance business support

Unexpectedly, most of this savings ended up in sight deposits (48 billion euros from March to June, or 25 billion more than over the same period in 2019). Passbooks are not left out, however, since 28 billion have been deposited there (this is 21 billion more than in 2019). On the other hand, the French have invested much less in life insurance (15 billion less from March to June than in 2019). They favor investments that ensure full availability of their investments.

If companies regret the lack of dynamism in consumption, Alain Tourdjman justifies the choice of savings: “For the French, it is not negative or positive, it is necessary. This corresponds to a need for the management of their future. The economist, however, notes an interest in this savings for companies, since it allowed in part to finance loans guaranteed by the State (PGE).

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