Informations Rapides · 20 January 2022 · n° 14

In January 2022, demand in manufacturing has remained strong and sourcing difficulties have somewhat eased Quarterly business survey (goods-producing industries) - January 2022

In January 2022, the balances of opinion of business managers related to the demand they get remain at a high level. To meet this demand, enterprises declare themselves to be less constrained than last October: the share of enterprises reporting being limited in their production only by supply difficulties has decreased for the first time since October 2020. Moreover, compared to October 2021, industrialists anticipate an acceleration in their selling prices. Finally, hiring difficulties have continued to grow and have reached a level unseen since 1991, the start of these series.

In January 2022, the manufacturers' opinion regarding the trend in demand remains very favourable. The balances on the past and expected variation in overall demand have been stable on the whole. Both of them have been well above their respective averages since July 2021.

The balance of opinion on the past trend in foreign demand has bounced back after the strong fall of October 2021. It stands well above its average. In addition, business managers have been as numerous as in last October to anticipate a rise in foreign demand over the next three months. There also, the balance has exceeded its long-term average level. As for the balance on the general exportation prospects of the French industry, it has withdrawn but remains above its average.

At 10 %, the proportion of companies declaring that their production has been limited by a lack of demand only has remained to the lowest level since the beginning of the series.

The share of firms reporting being limited in their production by supply difficulties only has decreased for the first time since October 2020, from 49 % in October 2021 to 40 % in January 2022. Nevertheless, this share remains very high compared to its long-term average level.

Sourcing difficulties remain significant but have somewhat eased in the manufacture of food products and beverages, in the "other industries" and in the manufacture of transport equipment. Conversely, in the machinery and equipment goods industries, the share of enterprises declaring sourcing issues has increased once again.

In January 2022, the production capacity utilisation rate has been stable for the third consecutive quarter, at 82 %, that is almost its long period average level. However, more companies have stated being at the limit of their current production capacity: the share of enterprises reporting not being able to increase their production with their current means if they received more orders has further risen. At 45 %, this share has never been higher since this question was first asked (1976). On the other hand, fewer business managers than last quarter have deemed their production capacity as sufficient given the expected changein orders over the next three months. The related balance has decreased for the fourth quarter in a row. Yet, business managers do not necessarily expect to be able to adjust it on the short term: the balance of opinion on the expected trend in investments during the next three months has clearly dropped compared to last October.

While they had been reporting a large rise in their selling prices since April 2021, business managers expect this trend to go on in 2022. Over the last three months their selling prices would have increased by +2 % on average compared to 0.2 % on average since 1991. Moreover, business managers expect an acceleration in their selling prices, which could grow on average by 1.7 % over the next three months, against a forecast of 1.2 % in October. This is the highest forecst since the series exist (1991).

Moreover, the balance on the general expectations for the change in hourly wages in industry has increased for the fourth consecutive quarter, this time moderately. It is well above its long-term average level.

The balances related to the change in the workforce size over the past three and the next three months have increased again, this time slightly. They are both well above their long-term average. At the same time, the proportion of companies experiencing recruitment difficulties has increased again and has reached 61 %. This is a new high point for these series whose average since 1991 is 30 %.

Asked about the development in their competitive position, business managers have stated that it should strengthen in the European Union. On the other hand, their competitive position should deteriorate slightly on the national market and outside the European Union.