In the manufacturing industry, business managers forecast a significant increase in their investment in 2016Industrial investment survey - April 2016

Surveyed in April 2016, business managers stated that investment in manufacturing industry increased by 1% in nominal value in 2015, revising by 3 points upwards their previous expectations given in last January.

Informations rapides
No 120
Paru le : 10/05/2016
Prochaine parution le : 07/11/2017 at 08:45 - October 2017

Surveyed in April 2016, business managers stated that investment in manufacturing industry increased by 1% in nominal value in 2015, revising by 3 points upwards their previous expectations given in last January.

Graph1_ang – Annual nominal change in investment in the manufacturing industry

  • Source: Industrial investment survey - INSEE

For 2016, business managers have confirmed their investment forecast of an increase of 7%

For 2016, business managers in the manufacturing industry forecast that their investment will increase by 7%, confirming their previous expectations given in last January. Investment should increase in all main sectors. Business managers revised theirs expectations downwards in the industry of machine and equipment (−5 points at +13%). On the contrary, they revised their expectations upwards in the manufacture of food products and beverages (+2 points at +13%).

Tab1_ang – Real annual investment growth

%
Real annual investment growth
NA* : (A17) et [A38] In 2015 In 2016
estimate Jan.16 observed Apr.16 estimate Jan.16 estimate Apr.16
C : MANUFACTURING INDUSTRY –2 1 7 7
(C1): Manufacture of food products and beverages –7 –1 11 13
(C3): Electrical and electronic equipment; machine equipment –3 –1 18 13
(C4): Manufacture of transport equipment 2 3 3 3
[CL1]: Motor vehicles 0 –1 3 1
(C5): Other manufacturing –1 1 4 4
Total sectors (C3-C4-C5) 0 1 6 5
  • How to read this table: in manufacturing industry, business managers surveyed in April 2016 have announced a nominal investment increase of 1% in 2015 compared to 2014 and forecast a nominal investment increase of 7% in 2016 compared to 2015.
  • * The codes correspond to the level of aggregation (A17) and [A38] of the "NA" aggregated classification based on NAF rev.2
  • Source: Industrial investment survey - INSEE

Business leaders are more numerous to anticipate an increase than a decrease in their investment in H2 2016

Surveyed in April 2016, business managers are slightly more numerous to anticipate an increase rather than a decrease in their investment between H2 2015 and H1 2016. For H2 2016, this trend is gathering pace and clearly more business leaders anticipate an increase than a decrease of their investment. The corresponding balance of opinion (+15) has reached its highest level since 2011.

Graph2_ang – Six-month change in investment (first estimation)

  • Source: Industrial investment survey - INSEE

In April, the investment revision indicator remains positive

The investment revision indicator remains positive in April because business managers are slightly more numerous to revise their investment forecast upwards rather than downwards. This indicator is based on investment amounts reported in at each survey by business leaders of the manufacturing industry except those of manufacture of food products and beverages and of coke and refined petroleum products.

GraphIR_ang – Investment revision indicator

  • Source: Industrial investment survey - INSEE

Investment mainly supports the replacement and modernization of equipment

In 2016, the purposes of investment should be quite similar to those of 2015. The current distribution is close to the average distribution observed since 1991. The share of investment devoted to replacement stays the most important, slightly above its long-term average. A quarter of investment would be used for the modernization of equipment, the share for energy savings remains slightly above its long-term average. On the contrary, the share of investment aimed to increase productive capacity or introduce to introduction of new products is likely to remain a little below its long-term average.

Tab2_ang – Share of purposes of investment

%
Share of purposes of investment
Average 2015 2016
1991-2015 actual forecast
Replacement 27 28 28
Modernization, streamlining 24 23 24
of which : automation 11 8 8
of which : new production methods 7 7 8
of which : energy savings 6 8 8
Increase in productive capacity 16 15 14
Introduction of new products 14 14 13
Other purposes (safety, environment, working conditions…) 20 20 21
  • Source: Industrial investment survey - INSEE

The balance of opinion about the change in productive capacity observed in 2015 (+23) confirms the forecast estimated last year (+21). For 2016, business leaders are more numerous than in 2015 to anticipate an increase of the productive capacity: the balance of opinion has grown to +28 but it remains above its long-term average (+31).

Tab3a_ang – Productive capacity and equipment scrapping

* balance of opinion, as % of responses - ** %
Productive capacity and equipment scrapping
Observed Forecast
aver. in 2015 aver. for 2015 for 2016
Change in productive capacity* 29 22 31 21 28
Change in equipment scrapping* 18 15 –2 16 –7
Share of enterprises reporting equipment scrapping** 76 71 75 66 67
Breakdown of enterprises reporting equipment scrapping**
Wear and tear, obsolescence 52 53 49 56 49
Installation of more efficient equipment 31 29 33 32 29
Shut-down of capacity for old products 12 10 12 9 13
Other scrapping 5 8 6 3 9
Total 100 100 100 100 100
  • Source: INSEE - Industrial investment survey