23 June 2016

2016- n° 161

In June 2016, the business climate in manufacturing has worsened but remains above normal Monthly business survey (goods-producing industries) - June 2016

According to the business managers surveyed in June 2016, the business climate in industry is less favourable. The composite indicator has lost 2 points. However, at 102, it remains above its long-term average (100).

The turning-point indicator is now in the zone indicating an unfavourable economic outlook.

In June 2016, the balance of opinion on past activity has slumped (−14 points) and has become inferior to its long-term average. However, that on personal production, already above its average since December 2015, has slightly increased (+2 points) and has returned to its April's level.

Business managers in manufacturing are less optimistic than in April on general production prospects in the sector (−4 points). However, the corresponding balance remains above its long-term average, as has been the case since February 2015.

In June, global order books are virtually stable. Export order books have slightly deteriorated again. The corresponding balances are above their mean.

Finally, more industrialists than in May consider that finished-goods inventories are above normal: the corresponding balance has increased since March and has become slightly superior to its long-term average.

The weakening of the business climate in the industry stems mainly from the “other manufacturing” sector and the manufacture of machinery and equipment goods. However, the business climate has improved in the manufacture of food products and beverages.

In the manufacture of food products and beverages, the business climate has increased by 2 points in June. Its level (106) is significantly above its long-term average it has exceeded since April 2016. Its improvement is mainly due to the balances of opinion on expected activity and on order books.

In the manufacture of machinery and equipment goods, the business climate fell below its long-term average in May and has slightly decreased again in June (−4 points since April). That comes from the balances on past activity and on production prospects.

On a sub-sector level, the composite indicator has continued to deteriorate in electrical equipment (−7 points since April) and has reached a level (93) significantly below its mean. In computer, electronic and optical product industry, the business climate is virtually stable (107 in June) above its mean level. In the machinery and equipment sector, it is stable (97) under its mean.

In the manufacture of transport equipment, the business climate is stable at 106, considerably above its long-term average. On the one hand, the balances on global order books and on past activity have increased; on the other hand, the balance on production prospects has plummeted and has become slightly inferior to normal.

In the manufacture of motor vehicle, trailers and semi trailers, as in the manufacture of other transport equipment, the business climates are virtually stable above their long-term average.

In overall “other manufacturing”, the business climate has lost 3 points. At 101, it remains slightly above its mean. This decrease stems from the decline of balances of opinion on order books and on past activity, partly offset by the rise of that on production prospects.

The business climates have plunged in chemicals and in “other manufacturing industries”, where they have become inferior to their long-term average. In plastics industries, it has decreased and has returned to its April's level, above normal. Conversely, it has improved in wood, paper and printing. It is virtually stable above its mean in basic metals and in the textiles and clothing industry.