11 May 2012

2012- n° 118

In manufacturing industry, business managers continue to forecast a dynamic investment in 2012 : +6% comparing to 2011 Industrial investment survey - April 2012

Surveyed in April 2012, business managers report that investment in manufacturing industry increased by 11% in 2011 comparing to 2010. They revised 1 point upwards their estimation given last January.

In April, business leaders in manufacturing industry revised by 1 point upwards the rebound of their investment for 2012 comparing to the previous survey, in January. They forecast an increase by 6% comparing to 2011. This downwards revision concern all sectors except those of manufacture of transport equipment (+2 points) and especially the sector of motor vehicles (+9 points). In this sector, the rebound in investment would be sharp in 2012 (+28% after -3% in 2011). Beside, the increase of investment would continue in the sectors of manufacture of food products and beverages (+6% after +7%) and in sectors of electrical, electronic and machine equipment (+7% as in 2011). On the contrary, in other manufacturing’s sectors investment would be sharply less important in 2012 (+2%) than in 2011 (+15%).

Comparing to H2 2011, business leaders report a less important rise of their investment in H1 2012. They anticipate also a more moderated rise in H2 2012 comparing to H1 2012.

According to business leaders in manufacturing industry, the share of purposes of investment would slightly change in 2012 comparing to 2011. The proportion of investment purposed to replacement would decrease by 2 points at 27%, a level closed to its long-term average (26%). The share of investment purposed to increase in productive capacity would also decrease (14% after 15% in 2011). On the contrary, industrials would increase the share of investment purposed to safety, environment, working conditions (22% after 20%) or purposed to automation (9% after 20%).

Business leaders in manufacturing industry are a little more optimistic concerning the change in productive capacity for 2012: the corresponding balance of opinion is 4 points higher than the balance of opinion for 2011, but this balance of opinion is still lower than its long-term average (33%).

According to the forecast of business leaders, only 65% of enterprises would do equipment scrapping in 2012 vs. 68% in 2011 and 77% in average. The rate of equipment scrapping for wear and tear, and obsolescence would decrease by 4 points at 50%. On the contrary, the share of equipment scrapping due to shut-down of capacity for old products would increase by 3 points at 18% vs. 12% in average. The share of equipment scrapping due to installation of more efficient equipment would stay at a low level : 27% vs. 32% in average.

The investment revision indicator lift up. That suggest that investment will increase at Q2 2011. Based on investment amounts filled in at each survey by business leaders of manufacturing industry except those of manufacture of food products and beverages (C1) and of coke and refined petroleum products (C2), this indicator is well-correlated with quarterly growth fixed capital formation of non-financial enterprises.