BAROMETER. The political situation in France has somewhat brought the road transport market there to a standstill. But for months now, cost inflation and price stagnation have already been damaging French carriers.
The performance of the French team at the UEFA Cup in Germany did not allow us to forget the very palpable tension that reigned in France after the dissolution of the National Assembly by President Emmanuel Macron on June 9. This decision caused a political earthquake and initiated a period of great uncertainty that is continuing. The "clarification" hoped for at the end of the early parliamentary elections did not take place, no political party having obtained an absolute majority. This situation is not without consequences for the French economy.
In June, the business climate remained below its long-term average standing at 99. The indicator that summarises it is calculated from the responses of the business leaders of the main market sectors essentially received before the 10th of the month, which suggests that most of the responses were given while the announcement of the dissolution had not yet occurred. As always, it was the financial markets that reacted first. Political uncertainty immediately caused interest rates on government debt to rise and the Paris Stock Exchange to fall by more than 500 points.
A stagnated situation
Road transport prices in France stagnated in June (+0.06% month-on-month). The politico-economic situation has most likely caused some inertia by curbing transport demand and freezing price negotiations between shippers and carriers on summer business.
Source: Upply Freight Index – Road France
In recent months, the amplitudes of variations have tended to decrease. The evolution of prices varies in a tunnel between -1.5% and 1%. Road transport is back in a situation where making forecasts is a much less chaotic affair than it was at the beginning of the decade with the Covid crisis or stagflation.
Traditionally, June has been a dynamic period for road freight transport, driven by construction, the preparation of the summer season and a driving force of consumption. But according to the monthly business survey of the Banque de France, activity increased only slightly in June 2024 in trade services. Moreover, the recovery was a little more apparent in industry and construction, but rather "thanks to a catch-up mechanism after a sluggish month of May".
The three indicators of the Upply Freight Index (Road France, Contract, and Spot) reflect this paralysis of activity.
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