8 November 2016

2016- n° 290

In the manufacturing industry, business managers forecast a stability in their investment in 2017 after a rise by 5% in 2016 Industrial investment survey - October 2016

Surveyed in October 2016, business managers forecast that investment in the manufacturing industry will expand by 5% in nominal terms in 2016 from 2015. They revised by 1 point downwards their previous expectations given in July 2016. In the sector of electrical and electronic equipment and machinery notably, investment should increase by 5%, instead of 10% as forecast in July.

On average over 2017, business leaders expect a stability in their investment expenditures compared with 2016. Investment should remain dynamic in the sector of electrical and electronic equipment and machinery (+9%). Conversely, investment should decline sharply in the sector of transport equipment (−10%).

More business leaders reported an increase in their investment between H1 2016 and H2 2016 than business leaders who reported a decrease. The corresponding balance (+9) is close to the previous one calculated in April 2016, above its long-term average. Business leaders who have forecast an increase between H2 2016 and H1 2017 are also more numerous than those who have anticipated a decrease. The corresponding balance (+6) fell back after hitting its highest level since 2011 in April 2016.

The investment revision indicator is positive in October 2016, as business managers were more numerous to revise their 2016 investment forecast upwards than downwards. This indicator is based on investment amounts declared at each survey by business leaders of the manufacturing industry except those in the agri-food industry and in that of coke and refined petroleum products.

For 2016 and 2017, the financing terms (level of self-financing, indebtedness, interest rates, overall financing conditions) are still considered to be stimulating. The related balances of opinion are above their long-term average. The balance on domestic demand outlook increased, that on foreign-deman outlook has remained also at a high level.

In 2017, the purposes of investment is set to be similar to those of 2016. The share of investment meant to the replacement of equipment should remain slightly above its long-term average as well as the share of investment meant to save energy.