Why do companies slow recovery
The firms play the game of real recovery? Their profits are excellent on both sides of the Atlantic in the second quarter. At the same time, growth remains too low to reduce unemployment and the specter of a double dip recession. Economists blame the companies responsible for this widening gap between profits and growth.
"The companies have not shared enough of their profits with their employees, and this could dampen the recovery," says Aneta Markowska, economist at Societe Generale CIB. In the U.S., the share of corporate revenues redistributed to employees has dropped from 59.8% in the second quarter, its lowest level since the Second World War.
Recruitment at half
Paradoxically, "the companies that have entered the crisis with little debt and thus did not need to rebalance their balance sheets, accumulate cash and threaten the recovery," says Aneta Markowska. Their cash is now nearly 6% of their assets, against less than 4.5% before the crisis. A level not seen since the 50s, according to figures from Societe Generale CIB. The most obvious translation of this strategy, they block the hiring.
Natixis, the head of economic research, Patrick Artus, made the same observation. In a classical revival, the increase in profits resulting from investment, thus creating jobs, which in turn produce growth. But this time it's different.'Distortion of revenue sharing to the detriment of employees led to the weakening of wage and salary income, thus accentuating the weakness of domestic demand, "says Patrick Artus in a note. In the U.S., it will need more time to households in debt up to his neck to clean up their finances before eating again.
Uncertainty
If companies are ants and jealously guard their cash flow, because a great uncertainty surrounding the economic outlook. Because of fears of fallout in recession, "they do not know what will be their future profits and (in the U.S., Ed) they have difficulty in measuring what the impact of tax measures on the viability of their projects investment ", according to Societe Generale economist IPC.
Growth at half-profits on the rise, "he will have to get used to the difference," said Patrick Artus, who believes this is a trend. First, large groups are investing in emerging markets with high potential, which boosts their results. Then the credit market freeze that followed the bankruptcy of Lehman Brothers has scalded. They now want to finance their own investments and not to depend on external funding.