BAROMETER. Road transport prices in France rose by 1.1% in May, as public holidays led to a concentration of demand. The ecological transition becomes a major subject, symbolized by the Decarbonization roadmap given to the French government by professional organizations.
The month of May in France was marked by a lull in the social unrest. Despite some sporadic outbursts, we have undoubtedly witnessed the epilogue of the pension reform confrontations, with the publication of the first implementing decrees at the beginning of June.
Slightly brighter economic outlook
The general economic climate is also showing some positive signs. The provisional estimate published by the INSEE on 21 May indicates an increase in consumer prices of 5.1% in May year-on-year, in clear decline compared to the inflation rate of 5.9% observed in April. In addition, the outlook for economic growth is improving. The European Commission, in its spring forecast published on 15 May, has revised its forecasts for the growth of the French economy upwards. GDP is expected to grow by 0.7% in 2023, 0.3 percentage points higher than what was expected in the forecasts published in autumn 2022. Moreover, the whole of Europe should benefit from slightly more favourable winds. The forecasts for GDP growth in 2023 have increased from 0.3% to 1.1% for the Eurozone and from 0.3% to 1% for the European Union. Inflation is expected to reach 5.8% in the Eurozone and 6.7% in the European Union, which again represents an improvement of 0.3 points compared to the autumn 2022 forecasts.
In France, the month of May was also marked by new announcements by the State in favour of accelerating the reindustrialisation of France. This strategy, presented by the President of the Republic Emmanuel Macron at the Élysée Palace, provides for 13 billion in foreign investment and the creation of 8,000 direct jobs. The Hauts-de-France region has been particularly successful: with the announcement of 4 gigafactories on its territory, including 2 in Dunkirk, it aims to become "the battery valley", at a time when the electric vehicle is revolutionizing the automotive industry.
Increase of net rates for French Road Freight Transport
Despite this wave of optimism, in the short term, the morale of French bosses remains low. In May 2023, the business climate in France lost two points compared to April and returns to its long-term average of 100. This is its lowest level since April 2021. All sectors of activity contribute to this general deterioration: in construction -3 points, in industry and services -2 points, in retail trade -1 point. Order intentions and business prospects are declining. This suggests lower volumes to be transported in the next quarter compared to last year.
Under these conditions, road transport prices in France show a notable increase of 1.1% in May 2023 compared to the previous month. This is the second consecutive month of increase.
Source: Upply Freight Index – Road France
The price increase in May only came as half a surprise. In April, diesel prices fell by 4.3%. With its impact occurring with a lag of about a month, a price drop in May limited to about 1% could have been expected (taking into account the fact that the share of fuel in total operating costs is estimated at 26.5% over long distances by the CNR). Following the same reasoning, with a further 6.6% drop in fuel in May, it would be normal to expect prices to fall in June.
The increase in May can be explained at least in part by the particularly high number of public holidays. In general, during the prolonged bank holiday weekends, there is a concentration of demand over a few days, which results in a strain on capacity and a consequent increase in tariffs (...)