24 September 2020

2020- n° 242

In September 2020, the recent rebound in activity has supported the business climate’s rise in wholesale trade Bi-monthly survey of wholesaling - September 2020

According to the managers surveyed in September 2020, the business climate in wholesale trade has improved again between July and September. The composite indicator has gained 13 points and stands at 92, below its long-term average (100). The rise in the balances of opinion related to past activity explains the improvement in the business climate. But the balances of opinion related to future activity, which had underpinned the business climate’s upturn in July, have hardly contributed to it in September.

The balances of opinion related to forthcoming activity have risen more moderately in September than in July and remain far from their pre-lockdown level. The balance of opinion on the general business outlook in wholesale trade has further improved, but more slowly than in July, and lies far under its January 2020 level.

The balance of opinion related to total ordering intentions has hardly increased and remains well below its average level, whereas it exceeded it clearly in January 2020. There is not a single sector where the wholesalers’ ordering intentions have recovered to their January level. Admittedly the related balance has climbed strongly in the wholesale trade of food products and beverages, but that reflects a more belated recovery than in other sub-sectors where this balance had bounced back earlier. This balance has grown a little in the wholesale trade of information and communication equipment, as well as in the wholesale trade of domestic goods. But in the wholesale trade of industrial capital goods, the sector that was hit hardest in May, this balance has fallen back after a sharp rebound in July.

The outlook for the wholesale trade with foreign countries has slightly deteriorated. The balance related to the traders’ intention to order from abroad has been stagnating and the one related to shipments to be delivered abroad has slipped back. Both these balances remain well below average.

From July to September 2020, the balances of opinion related to the activity of the past two months – sales and received merchandise – have sharply increased, after having started recovering in July. Nevertheless, those hikes have not offset the severe drop recorded between January and May yet.

The balance of opinion regarding forecasted workforce size has somewhat risen from July to September, after having straightened up in July. The balance regarding the recent change in workforce size has vividly grown, thus confirming the expectations given in July, but remains well below its average.

In September, the balance of opinion regarding past selling prices has remained virtually stable, the one on expected prices has slightly risen again. Both lie far below their long-term average.

Finally, fewer wholesalers have considered their cash flow situation to be difficult in September than in July. The related balance has further improved and has caught up with its average.

The business climate indicator in wholesale trade of July has been updated from 80 to 79 as a result of the integration of belated business answers.