French Business Leaders Remain Focused on Growth Amid Cost and Labor Concerns, Third Annual J.P. Morgan Survey Finds

Measured optimism prevails as French business leaders continue to have a favorable outlook on the global (54%) and national (51%) economies. While 73% report rising costs due to inflation, up 17% from 2023, about half (49%) expect a recession in 2024, according to J.P. Morgan's third annual France Business Leaders Outlook survey.

"The French business community continues to demonstrate a steady and practical mindset when thinking about the future," said Olivier Simon, Head of Commercial Banking, France and Benelux, J.P. Morgan. "In spite of navigating rising costs, ongoing uncertain economic conditions and a tough business climate, they're finding ways to grow and thrive."

In a survey of more than 250 C-suite executives from French midsize businesses, many are eyeing growth in 2024. Nearly eight-in-ten (78%) expect their revenue to rise in the year ahead, up 10% from 2023, and 66% expect profits to increase as well. Additionally, despite ongoing business challenges such as labor shortages and uncertain economic conditions, business leaders plan to propel company growth with 50% expecting to add headcount in the year ahead, up 9% from 2023. Similarly, 46% are prioritizing their most profitable products, while more than one-in-three plan to expand into new international (44%) and domestic (39%) markets in the year ahead.

"While French business leaders are naturally feeling less optimistic about the year ahead compared to last year, we're also seeing glimpses of hope among these companies," said Kyril Courboin, Head of France, Senior Country Officer, J.P. Morgan. "They're well-prepared for what's ahead, demonstrating their thoughtfulness, strategic mindsets and resilience."

Preparing for Multiple Possibilities
As French business leaders expect growth in the year ahead, a primary way they're positioning themselves for this is through several strategic financing options.

• Bank lines of credit were reported as the most popular type of financing with nearly two-thirds (62%, up 14% from 2023) of businesses currently using these facilities.

• The next top financing option that leaders are using is equipment financing (50%), closely followed by private placement debt or equity (45%), asset-based financing (44%) and commercial real estate (43%). Equipment financing was also cited as the top financing option planned in the year ahead at 36%.

Navigating Ongoing Labor Challenges While Aiming for Growth
Amid plans to add headcount, labor shortages were reported as a top external threat French business leaders are bracing for in the year ahead.

• One-third (33%) of French business leaders reported labor as a top challenge, driven by respondents' concerns around shortages, retention and recruiting needs. For comparison, only 24% of U.K. and 27% German business leaders cited labor issues as a concern.

• Other top challenges include uncertain economic conditions (30%), cybersecurity and fraud concerns (26%) and rising interest rates (26%).

Finding Ways to Embed AI into Business
Artificial intelligence (AI) tools, such as generative AI and language processing software, remains an opportunity and a priority for French business leaders, with 80% of reporting they currently use or are planning to use AI.

• Of those currently using or considering adopting AI, half are already applying AI to their business operations (51%) and their internal and external communications needs (50%).

• French business leader's plans for AI are in line with their U.K. (79%) and German (82%) counterparts.

For more information on the 2024 France Business Leaders Outlook survey, visit jpmorgan.com/business-leaders-outlook-FRA.

Survey Methodology
J.P. Morgan's Business Leaders Outlook survey was conducted online from November 16 ? December 13, 2023. In total, 261 business leaders (CEOs, CFOs, heads of finance and owners) from French midsized companies (annual revenues generally ranging from EUR ?20 million to ?2 billion) across various industries. Results are within statistical parameters for validity, and the error rate is +/- 6.0% with a 95% confidence level.

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