5 July 2016

2016- n° 176

For the first half of 2016, more business managers than in the end of 2015 have deemed their operating balance satisfactory Cash survey in industry - June 2016

In the first half of 2016, more business managers than in the previous six months considered that their operating balance was satisfactory. The corresponding balance of opinion has increased by 6 points and has reached its highest level (+30) since 2007, significantly above its long-term average (+6). Sales volume, sourcing prices and financial expenses fostered these results. For the next six months, more industrialists than in December have expected a further improvement of operating balances. The corresponding balance of opinion has returned below its long-term average.

A few more industrialists than in the previous half-year considered their cash position as easy. The corresponding balance of opinion has increased by 3 points and is at a level (−4) above normal (−8). More industrialists reported that the pace of capital spending and exceptional profits or losses had a negative impact on the cash flow during the past six months. For the next six months, more industrialists forecast an improvement of their cash position; the corresponding balance of opinion has become positive and is now above its mean. They were more numerous to intend to ramp up production, to raise investment expenditure and to increase their medium to long-term debt and more of them also have forecasted a decrease in selling prices.

More industrialists considered that medium to long-term debt dropped during the past six months. Conversely, they were more numerous to consider that short-term loans outstanding had increased and that they used more commercial paper. Regarding the level of equity capital of external origin, their opinion was stable.

In the first half of 2016, in the manufacture of food products and beverages, the balance of opinion on the operation balance dipped slightly but has remained significantly above normal; that on the cash position has been stable, very close to its long-term average. Business managers in this industry were more pessimistic in June 2016 than in December 2015 on the expected cash position and operating balance for the next six months.

According to the business leaders of the manufacture of machinery and equipment goods, the cash position and the operating balance improved slightly again in the first half of 2016. The corresponding balances of opinion are above their long-term average. The business leaders were as optimistic as in the previous half-year on the expected operating balance and significantly more optimistic on the expected cash position.

In the first half of 2016, the balance on the cash position in the manufacture of motor vehicles, trailers and semi trailers, were virtually stable, equal to normal. That on the operating balance, already significantly above its mean in December, improved again. For the next six months, the industrialists of this area were more upbeat than in December about the expected cash position and operating balance, the corresponding balances of opinion exceeding or reaching their long-term average.

In the manufacture of other transport equipment, even more industrialists than in the previous six months considered that the operating balances were satisfactory. The balance on cash position improved slightly but has remained below normal. More industrialists considered that cash position and operating balance were likely to decreased in the next six months.

In the other sectors of the manufacturing industry, the balances of opinion on the cash position and on the operating balances, already above their long-term average in the second half of 2015, improved again during the first half of 2016. For the next six months, a few more industrialists have forecasted an improvement of their cash position. However, they were less optimistic than in the second half of 2015 on the expected trend of operating balance for the next six months.