Companies in Provence-Alpes-Côte d’Azur : 2006 report and perspectives for 2007

Companies in Provence-Alpes-Côte d’Azur :
2006 report and perspectives for 2007

By Bernard Gamel director of Banque de France

The first figures registered by the Bank of France with a representative sample group of companies in the Provence-Alpes-Côte d’Azur region reveal that 2006 was a year of steady development of turnovers, investment and employment. The company managers foresee the continuity these favourable tendencies for 2007,with perhaps a slight slack in the rhythm in general

Confirming the observations collected in the course of the year by the Bank of France, the first 2006 results communicated by the regional companies seem globally positive and generally superior to the forecasts established at the beginning of the fiscal year.
Consequently, turnovers increased by approximately + 8 % in industry and service companies (against respectively + 5,5 % and + 4,2 % in 2005) and attained + 11 % in the building and public works sector. After the high performances recorded in 2005, this latter sector once again shows the strongest progress, confirming the persevering development of the real-estate market in a context of low interest rates, the dynamism of non-residential constructions and the favourable impact of the big public construction sites in the region. Furthermore, civil engineering showed an excellent cyclical orientation, with a growth rate of + 16 %. Illustrating these tendencies, the housing loans granted to families in the PACA region progressed by 17,5 % over one year.
The exports benefited from a constantly dynamic international context, notably in the service sector (+ 11 %). We must also stress the performances in industry, even though a drop in intermediate goods hindered the overall evolution (+ 4,1 %).

A regular intensification of the work load in industry and a more extensive use of production capacities incited companies to invest. The accumulation of investment expenditure announced in the Bank of France’s inquiry exceeds for the first time 1 billion euros, that is an annual increase of 19 % in industry, 12,5 % in services and 11 % in the building and public works sector.
This favourable situation was accompanied with a development of employment (including temps): although rather timid in industry (+ 0,5 %), it was stronger in building and public works (+ 4,7 %) and services (+ 6,7 %), leading to a 9 % decrease of the redundancy rate in the region within one year.
These tendencies are expected to continue in 2007. Company managers anticipate a new increase of turnovers, which should evolve at a moderate rhythm in industry and building and public works (approximately + 2,5 %) and more intense in services (+ 5,7 %). The net creations of employment should remain positive and investments are expected to continue increasing in industry and the building and public works sector.

* Inquiry made in January 2007 by the Bank of France with a representative sample of 1114 companies in the PACA region, achieving a turnover of 26 billion euros and employing 148,000 workers.