In the second quarter 2016, production capacity are more used in the manufacturing industryQuarterly business survey (goods-producing industries) - July 2016

In July 2016, the industrialists have reported that they used more their machinery and equipment. The production capacity utilisation rate has increased compared to the previous quarter (+1.1 points) and has reached its highest point since October 2008. Production capacity remains less used in the manufacturing industry than it was on average between 1994 and 2007.

Informations rapides
No 193
Paru le : 21/07/2016
Prochaine parution le : 24/10/2017 at 08:45 - October 2017

Increased use of the production capacity

In July 2016, the industrialists have reported that they used more their machinery and equipment. The production capacity utilisation rate has increased compared to the previous quarter (+1.1 points) and has reached its highest point since October 2008. Production capacity remains less used in the manufacturing industry than it was on average between 1994 and 2007.

Almost as many industrialists as in the previous quarter consider that they could produce more if they received more orders: the balance on production bottlenecks is virtually stable, slightly above normal. The proportion of industrialists indicating difficulties of demand is almost unchanged. However, an increasing number of industrialists has reported difficulties of supply only, the corresponding proportion getting closer to its long-term mean.

Graphang2 – Productive capacity utilisation rate

A new improvement in demand during the past months

Compared to the previous quarter, more industrialists judge that demand has increased as a whole in the past months; nevertheless, less of them judge that foreign demand has increased. The corresponding

balances are above their mean level. Over the next three months, industrialists are slightly more optimistic on future demand, but they are somewhat more pessimistic on that from abroad; however, the corresponding balances of opinion are still above average.

Graphang1_bis – Balance of opinion of past change in demand

tableau1 – Industrialists' opinion: demand and production factors

Balance of opinion, in %
Industrialists' opinion: demand and production factors
Manufacturing industry Mean Oct. 15 Jan. 16 April 16 July 16
Global demand
Past change 0 4 3 10 12
Future change 1 7 6 5 6
Foreign demand
Past change 2 7 6 9 7
Future change 4 13 12 8 5
Production factors
Production bottlenecks (in %) 22 29 24 25 26
Assessment of productive capacity 14 16 11 8 13
Production capacity utilisation rate (in %) 84,5 82,2 80,9 82,3 83,4
Difficulties of supply and demand (in %)
Difficulties of supply and demand 8 10 10 9 7
Difficulties of supply 20 15 14 14 18
Difficulties of demand 44 43 42 39 40
  • * : Long-term average since 1976.
  • The results of the last survey are preliminary.
  • Source: INSEE - Quarterly business survey

More industrialists report recent staff cuts

In July 2016, more industrialists than in April have reported that they reduced workforce in the past three months. Over the next few months, almost as many industrialists as in the previous quarter forecast job losses. Both balances have been above their long-term average since October 2013.

Three out of ten industrialists have experienced hiring difficulties; this part has been virtually stable since April 2013 and close to its long-term average.

Graphang3 – Workforce size in the manufacturing industry

Slight increase in wages

According to the business managers in the manufacturing industry, wages increased again in the past three months (+0.4% after +0.2%).

In July 2016, the balance of opinion on past change in working time has diminished. Over the next months, their opinion is almost unchanged. Both balances are slightly above normal.

Smaller decline in selling prices

According to industrialists, selling prices in the manufacturing industry dropped again in Q2, however at a lower pace than in the previous quarter (−0.2% after −0.6%). Business managers forecast virtual stability for the next quarter.

Almost as many industrialists as in the previous quarter have experienced cash-flow problems (11%). This proportion stands below its mean level (15%).

Deterioration in the opinion on competitive position

In July 2016, more industrialists than in April judge that their competitive position have deteriorated, whether on domestic market, either on European Union or outside European Union. These three balances are above their long-term average. However, industrialists are more optimistic than in April on general exportation prospects: the corresponding balance, already above normal in April, has increased by 6 points.

Graphang4 – Competitive position

tableau2 – Industrialists' opinion: employment, competitive position, cash-flow, wages and selling prices

Balance of opinion, in %
Industrialists' opinion: employment, competitive position, cash-flow, wages and selling prices
Manufacturing industry Mean Oct. 15 Jan. 16 April 16 July 16
Workforce size
Past change –11 –7 –6 –4 –9
Expected change –13 –6 –5 –6 –7
Difficulties hiring (in %) 28 29 30 30 31
Working time
Past change –3 2 2 2 –1
Expected change –5 2 –1 –1 –2
Cash-flow and wages
Cash-flow problems (in %) 15 13 11 12 11
Past wages 0,5 0,3 0,3 0,2 0,4
Selling prices
Past change 0,1 –1,4 –0,6 –0,6 –0,2
Expected change 0,2 –1,4 –0,5 –0,1 –0,1
Competitive position
On domestic market 1 –4 4 3 –1
On foreign markets inside EU –2 –7 2 2 –1
On foreign markets outside EU –2 –4 1 5 0
General exportation expectations –10 4 2 –7 –1
  • * : Long-term average since 1976.
  • The results of the last survey are preliminary.
  • A quantitative question is asked about selling prices and past wage.
  • Source: INSEE - Quarterly business survey