4 May 2018

2018- n° 120

In the manufacturing industry, business managers confirm their anticipation of an increase in their investment in 2018 Industrial investment survey - April 2018

The business managers in industry surveyed in April 2018 stated that their investment increased by 3% in 2017 in nominal terms. Last January's estimate has been upped by 1 point, a revision close to those usually observed in April. For 2018, the business leaders in industry forecast a 5% increase in their investment spending compared with 2017.

With an expected overall increase of 5% in investment for 2018, business managers have upped by 1 point their January 2018 estimate, whereas usually they maintain their forecast at that moment of the year (between 2004 and 2017 the average revision has been null). The upward revision is substantial in the sector of transport equipment.

The estimate for 2018 might be revised again during the next quarters: the forecast issued in April tends to overestimate the investment growth finally stated in July of the following year.

In April 2018, more business managers in industry reported a rise rather than a fall in their investment for H1 2018. The balance for the current semester (+16) is close to the October estimate, above its long-term average (+6).

For H2 2018, more business managers also forecast an increase in their investment than a drop. The balance for the expected next semester is almost stable compared to October (to +10) and remains above its long-term average (+6).

The purposes of investment forecast for 2018 should be quite similar to those of 2017. The current distribution remains close to the average distribution observed since 1991. The share of investment devoted to replacement stays the most important. A quarter of investment should be used for modernising equipment, while the share for energy savings remains slightly above its long-term average. On the other hand, the share of investment aimed at increasing productive capacity or introducing new products is likely to remain a little below its long-term average.

More companies decommissioned equipment in 2017 than expected in the April 2017 survey. The first reason for scrapping remains equipment wear and tear.

For 2018, business leaders are more numerous than in 2017 to anticipate an increase in their productive capacity: the balance of opinion has reached +45, its highest level since 2001.