Informations Rapides · 20 October 2022 · n° 273

In October 2022, production bottlenecks have been considered particularly high by the business leaders of the manufacturing industry Quarterly business survey (goods-producing industries) - October 2022

In October 2022, business leaders have estimated that the demand that has been addressed to them during the last three months has strengthened. For the next three months, their opinion about the overall demand has been almost unaltered compared to July, but it has deteriorated regarding the foreign demand. Besides, the share of companies declaring production bottlenecks has reached very high levels, and the share of industrial companies declaring hiring difficulties has remained close to its highest level.

In October 2022, the share of industrial companies claiming they would not be able to increase their production with their current means if they received more orders has clearly straightened up at 49%, after two months of decline. It is the highest level since the creation of this series in 1976. Moreover, a few more business leaders than in the previous quarter have considered their production capacity to be sufficient given the expected change in orders over the coming months. The associated balance of opinion is at its lowest level since 2001. As for the production capacity utilisation rate, it has slightly diminished at 81% and lies under its average level (83%) by a few.

The balance of opinion on the expected change in investment over the next three months introduced in this survey in October 2021, has grown for the third quarter in a row.

The business leaders' opinion on the demand that has recently been addressed to them has bounced back after deteriorating for two consecutive quarters. This improvement concerns both overall demand and foreign demand. Thus, the two balances of opinion stay above their average. The opinion of business leaders concerning expected change in the overall demand during the next three months has been almost unaltered, but the one on the change in the foreign demand has shrunk somewhat after its upturn in the previous quarter. These two balances of opinion are superior to their average.

The general exportation expectations are almost stable. The associated balance of opinion remains below its average.

In October, 65% of the business leaders have declared experiencing hiring difficulties, a share close to the highest point of the series reached last quarter. Meanwhile, the balances of opinion on the past as well as expected change of the workforce size have increased compared to July 2022. They both are distinctly above their average.

According to the business leaders surveyed in October 2022, the change of their selling prices during the last three months (that they have evaluated at +1.3%) might have been less strong than in the two previous quarters. As a comparison, they estimated last July that their prices had increased by 3.4% over the last three months. For the next three months, the expected change is on average +1.5% (compared to +1.4% the previous quarter).

The cash-flow situation of industrial enterprises has been deemed more degraded than three months before. The associated balance of opinion has reached its lowest level since a year (the series has been published since October 2021).

The balance on the general prospects of change in hourly wages in industry has increased for the seventh consecutive quarter. It lies at its highest level since 2001.

Asked about the recent evolution of their competitive position, business leaders have declared that it might have deteriorated, on the national market as well as inside and outside the European Union.

In the good-producing industry, more manufacturers in October 2022 than in April have announced a rise in their investment in 2022. The related balance of opinion increases in all sectors, except for the food industry, where it decreases sharply. The increase is highest in the other transport equipment sector.

Concerning 2023, manufacturers have expressed a first judgment on the expected trend in their investment: the associated balance of opinion is at this stage slightly lower than the one related to the change in investment in 2022.

For the year 2022, demand is the leading factor encouraging manufacturers to invest. The share of companies influenced in their investments by technical factors, the most frequently cited factor in October 2021, decreases somewhat. As for 2023, business managers also expect demand to be the main factor influencing their investments.

Replacing worn-out installations or equipment is the purpose of investment most often mentioned in 2022, followed closely by modernising and streamling production. In addition, the share of companies that invested in 2022 to extend their productive capacity increased significantly between October 2021 and October 2022. These three economic motivations are almost equally cited as reasons for investing in 2023.