8 January 2016

2016- n° 3

In the second half of 2015, business managers have still deemed the operating balances satisfactory Cash survey in industry - December 2015

In the second half of 2015, almost as many business managers as in the first half of 2015 considered that their operating balances were satisfactory. The corresponding balance of opinion has increased by 1 point and has reached its highest level since seven years (+25), significantly above its long-term average (+6). Wage costs, sourcing prices and sales volume fostered these results, contrary to sales prices. For the next six months, almost as many industrialists as in June expect a further improvement of operating balances.

As many industrialists as in the two previous six-month periods considered that their cash position was difficult. The corresponding balance of opinion has been stable at its long-term average (–8) since the second half of 2014. Less industrialists reported that the variation in stable external resources and the change in inventories have had a negative impact on the cash flow during the past six months. For the next six months, more industrialists than in the first half of 2015 have forecast a deterioration of their cash position. They were less numerous to intend to ramp up production and raise investment expenditure while they were more numerous to expect an increase of working hours or work force.

Less industrialists considered that medium to long-term debt dropped during the past six months. However, they were more numerous to consider that short-term loans outstanding decreased. Moreover, the industrialists reckoned that their external equity increased and that they used less commercial papers than in the previous six months.

In the second half of 2015, in the manufacture of food products and beverages, the balance of opinion on the cash position dipped and is now close to its mean; conversely, that on the operating balances, already significantly above the normal, has continued to rise. Industrialists of this industry were much more optimistic in December than in June 2015 on the expected cash position for the next six months.

According to the business leaders of the manufacture of machinery and equipment goods, the cash position and the operating balances bettered in the second half of 2015. The corresponding balances of opinion are above their long-term average. The business leaders were more optimistic than in the previous six months on the expected cash position but significantly more pessimistic on the expected operating balances.

In the second half of 2015, the cash position in the manufacture of motor vehicles, trailers and semi trailers, has been virtually stable, close to normal. The balance of opinion on the operating balances is still significantly above its mean. For the next six months, the industrialists of this area were more pessimistic than in June about the expected cash position and operating balances, the corresponding balances of opinion falling below their long-term average.

In the manufacture of other transport equipment, the balance on cash position deteriorated further during the second half of 2015. Conversely, the operating balances have been deemed as satisfactory as in the previous six months. According to the industrialists, cash position is likely to decrease again in the first half of 2016. They were less than in June to anticipate an improvement of the operating balances.

In the other sectors of the manufacturing industry, the balance of opinion on the cash position is virtually stable, close to its long-term average. That on the operating balances is stable above its long-term mean. For the first half of 2016, industrialists forecast a slight deterioration of their cash position. More industrialists than in the previous survey have forecasted a progress of operating balance.

Since the survey of June 2015, due to the integration of late answers, most of the balances of opinion concerning the first half of 2015 have been revised. In particular, in the industry as a whole, that on operating balance has been raised (+2 points) and that on expected movement of cash position has been lowered (–3 points).