Covid 19: what is the real cost of the crisis for businesses?

A year after the first confinement, the toll of the crisis is heavy for companies, despite public aid.

Businesses have indeed been heavily involved, more than households.

This reflects the collective choices that have been made over the past year: with partial unemployment in particular, the government has sought to preserve the purchasing power of households, which generally stagnated last year.

Basically, the state wanted to neutralize the impact of the crisis on households.

It played its role of shock absorber to the full.

For businesses, however, it is not the same story.

According to calculations by the Rexecode economic research institute, all French non-financial companies plunged into the red last year.

They have paid a heavy price.

It's historic, it hadn't happened for over 30 years.

Since 1984 exactly.

If we add up the profits and losses of all French companies, year after year we always arrive at a positive result of several tens of billions of euros, it has been between 40 and 60 billion euros since the middle of the 1990s. And fortunately, because it is these global benefits that allow our companies to invest and develop.

In 2019, before the Covid, their profit even reached 75 billion.

But last year, for the first time in a long time, "the France company", if one can say so, was in loss, a loss of five billion euros.

The margin rate has also fallen to the lowest since the mid-1980s, and that is obviously a weakness for the future.

This translates into a greater recourse to debt.

Companies had to go into debt just to maintain their production capacities.

We often talk about the public debt, which has exceeded 100% of the GDP, we are even at 120%.

Corporate debt has also jumped from 74% to 86% of GDP, which is to say not far from double the ratio of German companies.

This is why it is crucial now that French companies strengthen their equity: this is the purpose of the plan that was announced last week.

By preserving the purchasing power of households, the government saved consumption, which act.

But at the same time the financial situation of companies has weakened.

The priority now will be to prevent too many of them dropping out.