In Q1 2017, production capacity was slightly less used in the manufacturing industryQuarterly business survey (goods-producing industries) - April 2017

In April 2017, the industrialists have reported that they used slightly less their machinery and equipment. The production capacity utilisation rate has decreased by 0.2 points compared to the previous quarter, to 83.6%. It still slightly exceeds its average between 1995 and 2007.

As industrialists as in the previous quarter consider that they could produce more if they received more orders: the indicator on production bottlenecks is stable above normal. The proportion of industrialists indicating difficulties of supply remains close to normal, that of industrialists reporting difficulties of demand only remains below its long-term average.

Informations rapides
No 108
Paru le : 25/04/2017
Prochaine parution le : 24/01/2018 at 08:45 - January 2018

Slight decrease in the use of production capacity

In April 2017, the industrialists have reported that they used slightly less their machinery and equipment. The production capacity utilisation rate has decreased by 0.2 points compared to the previous quarter, to 83.6%. It still slightly exceeds its average between 1995 and 2007.

As industrialists as in the previous quarter consider that they could produce more if they received more orders: the indicator on production bottlenecks is stable above normal. The proportion of industrialists indicating difficulties of supply remains close to normal, that of industrialists reporting difficulties of demand only remains below its long-term average.

Graph 1 – Production capacity utilisation rate

Industrialists are less upbeat on demand

Compared to the previous quarter, fewer industrialists judge that demand, whether global or foreign, increased in the past months. However, the corresponding balances remain above their mean level. Industrialists are also less upbeat than in January on global and foreign demand over the next three months; the corresponding balances of opinion also remain above average.

Graph 2 – Balance of opinion of past change in demand

Table 1 – Industrialists' opinion: demand and production factors

Balance of opinion, in %
Industrialists' opinion: demand and production factors
Manufacturing industry Mean July 16 Oct. 16 Jan. 17 April 17
Global demand
Past change 0 14 3 12 9
Future change 1 5 8 9 6
Foreign demand
Past change 2 8 4 13 8
Future change 4 5 7 10 8
Production factors
Production bottlenecks (in %) 22 26 27 29 29
Assessment of productive capacity 14 11 12 7 1
Production capacity utilisation rate (in %) 82.9 83.8 82.9 83.8 83.6
Difficulties of supply and demand (in %)
Difficulties of supply and demand 8 7 10 9 8
Difficulties of supply only 20 18 18 19 20
Difficulties of demand only 44 39 36 35 32
  • * : Long-term average since 1976, except for questions on difficulties of supply and demand.
  • The results of the last survey are preliminary.
  • Source: INSEE - Quarterly business survey in industry

As industrialists as in January report staff cuts

In April 2017, as industrialists as in January have reported that they reduced workforce in the past three months and as many as before forecast job losses. Nevertheless, both balances are above their long-term average since October 2013.

Almost one out of three industrialists has experienced hiring difficulties; this part has recovered in April and is now just above its long-term average.

Graph 3 – Workforce size in the manufacturing industry

Virtual stabilisation in past selling prices

According to industrialists, selling prices in the manufacturing industry were virtually stable in Q1 2017 (−0.1%). Business managers forecast a further virtual stability in Q2 2017 (+0.1%).

The proportion on industrialists that have experienced cash-flow problems has been stable at 11% since July 2016, below its mean level (14%).

General exportation expectations have slumped

In April 2017, the industrialists' opinion on their competitive position on domestic market, foreign markets inside EU or outside EU has improved. These three balances were already above their long-term average in January. Nevertheless, industrialists are much less upbeat than in January on general exportation prospects: the corresponding balance has fallen to its lowest level since Q4 2014, just above normal.

Graph 4 – Competitive position

Table 2 – Industrialists' opinion: employment, competitive position, cash-flow and selling prices

Balance of opinion, in %
Industrialists' opinion: employment, competitive position, cash-flow and selling prices
Manufacturing industry Mean July 16 Oct. 16 Jan. 17 April 17
Workforce size
Past change –11 –8 –5 –2 –2
Expected change –12 –7 –1 –4 –4
Difficulties hiring (in %) 28 31 34 27 30
Selling prices and cash-flow
Past change on selling prices 0.1 0.0 –0.1 0.6 –0.1
Expected change on selling prices 0.2 –0.1 0.3 0.3 0.1
Cash-flow problems (in %) 14 11 11 11 11
Competitive position
On domestic market 1 0 0 2 4
On foreign markets inside EU –1 –1 0 1 6
On foreign markets outside EU –2 –1 –3 4 6
General exportation expectations –10 –1 0 5 –9
  • * : Long-term average since 1976, except for workforce change (since 1976) and for competitive position by market (since 1997).
  • The results of the last survey are preliminary.
  • A quantitative question is asked about selling prices.
  • Source: INSEE - Quarterly business survey in industry