6 May 2019

2019- n° 119

Business managers in manufacturing industry continue to anticipate a sharp increase in their investment in 2019 Industrial investment survey - April 2019

The business managers in industry surveyed in April 2019 stated to have stabilised their investment in nominal terms in 2018, thus confirming the estimate given last January. For 2019, the business leaders in industry anticipate to increase sharply their investment spending, which should increase by 11% compared to 2018. Thereby, they have raised their January estimate by one point, slightly more than the average revision at this time of year.

With an overall increase of 11% in investment expected for 2019, business managers have revised up by one point their January 2019 estimate, slightly more than usually observed at this time of year (the revision has been zero on average between 2004 and 2018).

For 2019, investment is expected to pick up sharply in the sector of electrical, electronic and machine equipment and in the “other manufacturing” sector. It should rebound strongly in the agri-food industry and in the transport equipment sector.

The business managers estimate for 2019 could be revised over the next quarters. On average since 2003, the forecast issued in April has been 4 points higher than the value ultimately declared in July of the following year.

For the first half of 2019, as compared to the second half of 2018, more business managers in industry have reported a rise rather than a fall in their investment. The balance related to investment change in the current half-year (+17) has increased well above its long-term average (+7).

For the second half of 2019, business leaders have also been more numerous to anticipate a rise than a drop in their investment but the balance regarding investment in the next half-year has fallen back sharply, to +4 after +13, dropping below its long-term average (+6).

The share of investment devoted to replacement should fall by two points in 2019 as compared to 2018 but should stay the most important. Slightly more than a fifth of investment should be used to modernise equipment, while the share for energy savings remains slightly higher than in the past, unlike that devoted to automation. The share of investment aimed at increasing productive capacity for existing products should rise by one point, slightly above its long-term average.

Less companies decommissioned equipment in 2018 than on average since 1991. The first reason for decommissioning remains equipment wear and tear.

For 2019, business leaders are planning more than average to increase their productive capacity during the year. However, the balance of opinion has felt from its last year’s peak.