The business climate improved modestly in Reunion in the 3rd quarter of 2023 against a backdrop of slowdown in activity, according to the latest economic trends in Iédom.
The business climate indicator increased by 1,2 point, close to its long-term average. The cash flow level has improved, and business investment prospects have recovered. Activity nevertheless weakens, and the rise in input prices is still weighing on operating costs for all sectors. At the same time, household consumption continues to run out of steam. Credit card payments fell by 6,3% compared to the same period of the previous year, and persistent inflation (3,3% year-on-year at the end of September) weighs on purchasing power. Labor market conditions remained stable in the 3rd quarter. Job creation continued to slow down, the dynamic of the private sector is less strong than in 2022 even if the commercial sectors, accommodation and catering, and business services always create jobs. Companies are a little more optimistic about their investment prospects. Trade has rebounded, with an increase of 2,2% of imports compared to the previous quarter, but remain in decline over the year. Activity is deteriorating in the majority of sectors, including that of commercial services, which had held up well until the start of 2023. Activity in the tourism sector has stabilized (-3,5% number of nights over the quarter), after a year of post-Covid recovery. In the construction sector, activity continues to deteriorate at a rate close to the previous quarter. Only commercial and agricultural businesses remained optimistic, au 3e trimestre, regarding their business volume.
