27 August 2019

2019- n° 214

Business managers in manufacturing industry have lowered their investment expectations for 2019 Industrial investment survey - July 2019

The business managers in industry surveyed in July 2019 stated to have increased their investment by 2% in nominal terms in 2018, thus rising by 2 points the estimate given last April. For 2019, the business leaders in industry anticipate to increase their investment spending by 6%, a relatively sustained pace. Nonetheless they have lowered their April estimate by 5 points. This downward revision is sharper than the average revision at this time of year.

With an overall increase of 6% in investment expected for 2019, business managers have lowered by 5 points their April 2019 estimate, more than usually observed at this time of year (the average revision between 2004 and 2018 has been −2 points at this time of year).

For 2019, investment is expected to pick up in the sector of electrical, electronic and machine equipment and in the “other manufacturing” sector. It should rebound strongly in the transport equipment sector. In the agri-food industry, investment should slightly rise in 2019 as well as in 2018 (+1%).

The business managers estimate for 2019 could be revised over the next quarters. On average since 2003, the forecast issued in July has been 2 points higher than the value ultimately declared in July of the following year.

For the first half of 2019, more business managers in industry have reported a rise rather than a fall in their investment as compared to the second half of 2018. The balance of opinion related to investment change in the past half-year (+20) has increased and stands well above its long-term average (+7).

On the contrary, for the second half of 2019, business leaders have been more numerous to anticipate a fall than a rise in their investment. The balance regarding investment in the current half-year has indeed fallen back sharply, to −1 after +13, dropping below its long-term average (+4).