The socio-economic situation in February was mixed. In shipping, energy, automotive or luxury industries, our French champions, such as CMA CGM, announced record profits. More very good news: the PMI index, which measures private sector activity, recovered to 51.6 in February, marking the highest rate of expansion of the French economy since July 2022. The Banque de France and INSEE have ruled out the risk of a recession.
Yet, on the other hand, anxiety-provoking news is rife. There is talk of an ongoing chapter of disasters in the clothing sector where liquidations are accumulating. Inflation is continuing and it is hitting the wallets of the French hard. According to INSEE, it amounted globally to 6.2% in February year-on-year, but to more than 14.5% in food prices. In these conditions, it is understandable to see that the morale of households is at a low. At 82, the index is 18 points below its long-term average. At the same time, the savings rate is rising.
The pension reform project further crystallizes tensions. The trade unions are in the streets protesting this reform, but with the problems of purchasing power and social justice also now in the background.
Against this chaotic backdrop, road transport prices have remained almost stable. The Upply Freight Index shows a timid rise of +0.2%, as if the market was holding steady, but the analysis of the diesel component reveals another reality.
Source: Upply Freight Index – Road France
The impact of changes in fuel costs generally occurs with a lag of one month. In January, the increase in the price of diesel was 2.4%. The weighting of fuel in the total cost of transport varies, according to the CNR, from 20% to 26.5% depending on the type of transport. We could therefore mechanically expect a minimum increase of between 0.5% and 0.65%, knowing that the CNR LD EA (Long Distance Articulated Unit) index was up 0.8% in January.
It can therefore be estimated that the increase in transport prices observed in February is mainly due to the increase in diesel fuel at the pump in January, even if arithmetically, the increase only compensates for about a third of the additional costs incurred by carriers. But this is not the only explanation. The sluggish economic situation is leading to weak demand, which is causing transport needs in France to contract and driving the UFI Spot down (...)
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