Informations Rapides · 25 August 2022 · n° 214

In August 2022, the business climate in manufacturing industry has deteriorated again Monthly business survey (goods-producing industries) - August 2022

According to the business managers surveyed in August 2022, the indicator of the business climate in the manufacturing industry has decreased again. At 104, the composite indicator has lost two points but remains above its average (100). The falls in the balances of opinion on the overall order-books and on past production have mainly contributed to this degradation. On the contrary, the rise in the balance of opinion on the expected production has limited the deterioration of the climate.

In August 2022, the business leaders’ opinion on the level of their order-books, overall as well as foreign, has deteriorated for the second month in a row. These balances nevertheless remain superior to their respective averages.

Sharply increasing this month, the balance of opinion associated with the current level of the finished-goods inventory has gone over its average for the first time since July 2020. Way more business leaders than last months are considering their finished-good inventory to be over its normal level. In the manufacture of transport equipment and in the branch of the “other industries” this balance of opinion has reached its highest level since 2009. For the manufacture of electrical equipment, this balance has reached a new high point (since 1990). However, the balance on the finished-goods inventory is, as in July, far below its average in the manufacture of food products and beverages.

The share of companies declaring supply difficulties has been quasi stable in August 2022, at a very high level (44 %). The share of companies declaring that they have been limited in their production by a lack of staff has been stable, at its highest level (26 %) since the series was published (1991). In addition, the share of companies declaring obstacles to production because of supply difficulties only has reached 53 %, its highest level since the series exists (1991).

The balances of opinion of business leaders on production have displayed contrasting movements in August. The one on the change in production over the last three months has gone under its average for the first time in two years. On the contrary, the balance on the expected change in production has grown for the third month in a row and has moved away from its average as a consequence. Likewise, the balance of opinion on the general production prospects has improved, after a stability last month; it is superior to its average.

The balance of opinion measuring the level of perceived economic uncertainty felt by the business leaders has diminished.

The one on the expected trend in selling prices has somewhat rebounded after its sharp fall from last month. It stays well above its average.

Finally, the balances of opinion concerning the past and expected change in workforce have bounced back and remain largely above their long-term level.

In the manufacture of transport equipment, the business climate indicator has contracted after four months of rise and has fallen back to its average level. In particular, in the manufacture of motor vehicles, the climate indicator has dropped well below its average, due to the fall in the balances of opinion on order-books. Conversely, in other transport equipment, the business climate indicator has slightly risen and remains above its average.

In the so-called "other industries" sub-sector, the business climate has again somewhat deteriorated in August and has fallen back just below its average (100). It has been mainly affected by the further decline in the balances of opinion on order-books. The balance relating to the foreign order-books has diminished to its average level. For the manufacture of wood, paper and printing, the balance of order books has sharply dropped and has got back below its average.

In the manufacture of food products and beverages, the business climate indicator has been stable, above its average. The share of companies reporting production constraints linked to supply problems has moderately rebounded, after having sharply withdrawn last month.

In the sub-sector of machinery and equipment goods, the business climate indicator has slightly grown for the third consecutive month; it is well above its average.

The business climate in manufacturing industry of July 2022 has not been revised (after rounding).