In August 2016, the business climate in manufacturing has fallen backMonthly business survey (goods-producing industries) - August 2016

According to the business managers surveyed in August 2016, the business climate in industry is less favourable. The composite indicator has lost 2 points. At 101, it is slightly above its long-term average (100).

Informations rapides
No 216
Paru le : 25/08/2016
Prochaine parution le : 21/12/2017 at 08:45 - December 2017

According to the business managers surveyed in August 2016, the business climate in industry is less favourable. The composite indicator has lost 2 points. At 101, it is slightly above its long-term average (100).

Graphang1 – Business climate in industry - Composite indicator

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

Graphang2 – Turning-point indicator

  • How to read it: close to 1 (respectively −1), the indicator points to a favourable short-term economic situation (respectively unfavourable). Between −0.3 and +0.3: uncertainty area.

Deterioration of the opinion on activity

In August 2016, the balance of opinion on past activity has deteriorated (−6 points) and has returned to its long-term average. That on personal production, already below normal in July, has decreased further (−3 points).

Business managers in manufacturing are a few less optimistic than in July on general production prospects in the sector (−2 points). The corresponding balance has remained above its long-term average since February 2015.

In August, order books have deteriorated as a whole but export ones are stable; the corresponding balances of opinion remain above their mean.

Finally, fewer industrialists than in July consider that finished-goods inventories are above normal: the corresponding balance has decreased by 6 points and has returned below its long-term average.

tableau1 – Industrialists' opinion on manufacturing activity

Balance of opinion, in %
Industrialists' opinion on manufacturing activity
Manufacturing industry Ave.* May 16 June 16 July 16 Aug. 16
Composite indicator 100 104 102 103 101
Past activity 4 13 –1 10 4
Finished-goods inventory 13 11 14 16 10
Global order books –18 –13 –13 –12 –15
Export order books –14 –8 –9 –9 –9
Personal production expectations 5 7 9 2 –1
General production expectations –9 5 1 2 0
  • * Long-term average since 1976.
  • Source: INSEE - Monthly business tendency survey

The downturn in the business climate in the industry stems mainly from the manufacture of food products and beverages. In the manufacture of transport equipment and in “other manufacturing”, the business climate has slightly worsened. In the manufacture of machinery and equipment goods, it holds steady.

In the manufacture of food products and beverages, the business climate has slumped

In the manufacture of food products and beverages, the business climate has decreased by 7 points in August and has returned to its long-term average. This deterioration is mainly due to the balances of opinion on past activity and on global order books that have fallen below normal.

In the manufacture of machinery and equipment goods, the business climate is stable

In the manufacture of machinery and equipment goods, the business climate is stable slightly below its long-term average. The balance on past activity has decreased but that on export order books has increased.

On a sub-sector level, the composite indicator, already below normal, has deteriorated in electrical equipment (−2 points). In computer, electronic and optical product industry, the business climate is stable at 104, above its mean level. In the machinery and equipment sector, the business climate has recovered (+2 points) but remains below normal.

The business climate in the manufacture of transport equipment remains above its mean

In the manufacture of transport equipment, the business climate has lost one point again albeit remaining above its long-term average. This slight decrease is due to the decline in the balances on past activity and on global order books.

The business climates have slightly weakened in both the manufacture of motor vehicle, trailers and semi trailers and in that of other transport equipment. However, both remain above their long-term average.

The business climate is just above normal in “other manufacturing”

In overall “other manufacturing”, the business climate has decreased by one point and is just above normal. The balances of opinion on past activity and on global order books have worsened, but that on production prospects has improved.

The business climate has deteriorated in the manufacture of wood-paper and has become slightly inferior to its long-term average. It is little changed in other sub-sectors, remaining close to normal, excepted in textile industries where it is significantly above its mean.

tableau2Climats – Business climates in a sector-based approach

Standardised indicators: average = 100 and standard deviation = 10
Business climates in a sector-based approach
NA* : (A17) et [A38 et A64] Weights** (%) June 16 July 16 Aug. 16
(C1) Man. of food products and beverages 21 104 107 100
(C3) Machinery and equipment goods 11 98 99 99
[CI] Computer, electronic and optical products 3 107 104 104
[CJ] Electrical equipment 3 92 98 96
[CK] Machinery and equipment 5 97 95 97
(C4) Man. of transport equipment 15 106 105 104
[CL1] Motor vehicles, trailers and semi-trailers 7 106 106 104
[CL2] Other transport equipment 8 103 104 103
(C5) Other manufacturing 46 102 102 101
[CB] Textiles, clothing industries, leather and footwear industry 2 108 111 112
[CC] Wood, paper, printing 5 105 103 99
[CE] Chemicals and chemical products 9 97 100 100
[CG] Rubber and plastic products 7 103 102 100
[CH] Basic metals and fabricated metal products 11 104 102 101
[CM] Other manufacturing industries 9 97 101 100
  • * NA: aggregated classification, based on the French classification of activities NAF rév.2.
  • ** Weights used to aggregate sub-sector's balances of opinion.
  • Source: INSEE - Monthly business tendency survey