25 June 2014

2014- n° 143

In June 2014, the business climate in manufacturing industry deteriorates Monthly business survey (goods-producing industries) - June 2014

According to the business managers surveyed in June 2014, the business climate in industry has deteriorated anew compared to the previous month. The composite indicator has decreased by one point and stands below its long-term average.

The turning-point indicator, going down clearly compared to May, has switched into the unfavorable zone.

The balance of opinion on past change in production is nearly stable and remains above its long-term average. As for the balance of opinion on personal production expectation, it is also stable and stands at a level which is very close to its long-term average.

Both global and export order books have deteriorated markedly and a majority of industrialists consider them as below their normal level.

The balance on general production expectations, which represents business managers’ opinion on French industry as a whole, has clearly decreased, at a level which is below its long-term average.

Finally, stocks of finished products have slightly gone up but their level remains close to their normal level.

In the manufacture of food products and beverages, the balance on past activity has decreased and stands anew at its long-term average. Stocks of finished products are nearly stable and are considered as very close to their long-term average. Both global and export order books have deteriorated and are considered as below their normal level. The balance on expected activity has improved and stands anew at its long-term level.

In the manufacture of electrical and electronic equipment, machine equipment, industrialists consider that their past activity has strongly deteriorated. Stocks of finished products have clearly decreased and are now described as normal. As for the global and foreign demand, it keeps deteriorating and is considered by industrialists as very weak. Their production expectations have deteriorated and are bad-biased.

In the manufacture of motor vehicles, trailers and semi trailers, the past activity remains dynamic over the last three months. On the contrary, the expected production has markedly weakened, so that indicates a slowdown for the three next months. The opinion over global and export order books remains negative : the corresponding balances stand clearly below their long-term levels. The finished-goods inventory level is considered anew as normal.

In June, in the manufacture of other transport equipment, the balance of opinion on past activity has decreased but stands at a level markedly above its long-term average. Stocks of finished products have sharply gone up and are considered as very high. Both global and foreign order books are stable compared to May. While the first are described as still high, the second are considered as weakly filled. According to the industrialists from this area, activity is likely less dynamic over the next months.

According to business managers, the past activity has deteriorated in the manufacture of rubber and plastic products, but has stabilized in that of of basic metals and has gone up in that of of chemicals. In the manufacture of pharmaceutical, the past production has clearly increased. The industrialists foresee a deterioration of their activity in the manufacture of pharmaceutical products and in that of chemicals, a stable but weak activity in that of rubber and plastic products and expect a slightly improvement in that of basic metals. In all sectors, the level of global and foreign order books is considered by the industrialists as low. At last, the levels of finished-goods inventory are nearly stable at a low level in the manufacture of pharmaceutical products and in that of basic metals, while they have clearly gone up in the manufacture of chemicals and in that of rubber and plastic products to reach a normal level.