In May 2017, the business climate in manufacturing remains at its highest level since June 2011Monthly business survey (goods-producing industries) - May 2017

According to the business managers surveyed in May 2017, the business climate in industry remains at 109, its highest level since June 2011, significantly above its long-term average (100).

Informations rapides
No 133
Paru le : 23/05/2017
Prochaine parution le : 26/09/2017 at 08:45 - September 2017

According to the business managers surveyed in May 2017, the business climate in industry remains at 109, its highest level since June 2011, significantly above its long-term average (100).

Graph 1 – Business climate in industry - Composite indicator

The turning-point indicator remains in the zone indicating a favourable economic outlook.

Graph 2 – 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.

The balance of opinion about general production expectations has jumped

In May 2017, the balance of industrialists' opinion on their past activity has edged down while that on personal production expectations is virtually stable. Both are significantly above their normal level.

Business managers are much more upbeat than in April on general production prospects for the sector. The corresponding balance has jumped and is significantly above its long-term average, that it has exceeded since February 2015.

In May, their opinion on overall and export order books is almost unchanged, the corresponding balances being significantly above normal.

Finally, almost as industrialists as in April consider that finished-goods inventories are below normal: the corresponding balance remains below its long-term average.

Table 1 – Industrialists' opinion on manufacturing activity

Balance of opinion, in %
Industrialists' opinion on manufacturing activity
Manufacturing industry Ave.* Feb. 17 March 17 April 17 May 17
Composite indicator 100 107 105 109 109
Past activity 5 8 5 18 15
Finished-goods inventory 13 6 7 6 5
Global order books –18 –8 –9 –4 –5
Export order books –14 –3 –5 –1 –2
Personal production expectations 5 19 11 13 14
General production expectations –9 5 3 1 7
  • * Long-term average since 1976.
  • Source: INSEE - Monthly business tendency survey in industry

Revisions

The business climate in manufacturing in April 2017 has been slightly raised from its first estimation last month, from 108 to 109, due to late answers from businesses that have been taken into account.

Slight sectoral variations offset each other

The stability in the business climate in industry in May comes from a slight decrease in transport equipment and in “other manufacturing”, offset by a slight increase in equipment goods and in food products and beverages.

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

In May, the business climate has increased by one point in the manufacture of food products and beverages, at 104, thus remaining above normal. All balances of opinion have contributed to this improvement, except that on past activity, which has declined.

In the manufacture of machinery and equipment goods, the business climate has reached its highest level since March 2008

In the manufacture of machinery and equipment goods, the business climate has increased by one point reaching 110, its highest level since March 2008. This further increase comes from a further improvement in the balance of opinion on overall and export order books, which have reached their highest level since April 2008.

In the computer, electronic and optical product industry, the business climate has recovered, hitting its highest level since October 2015. It has slightly increased reaching a level unseen, since June 2011 in electrical equipment and since April 2011 in machinery and equipment.

The business climate remains above normal in the manufacture of transport equipment

In the manufacture of transport equipment, the business climate has decreased by one point but, at 105, remains above its long-term average. This slight fall mainly comes from a fall in the balance on past activity.

In the manufacture of motor vehicles, trailers and semi-trailers as in other transport equipment, the business climate has slightly decreased, albeit remaining above normal.

In “other manufacturing”, the business climate remains significantly above normal

In overall “other manufacturing”, the business climate has decreased by one point, after having reached its highest level since June 2011. Its level (107) remains significantly above normal. This slight decline comes from the drop in the balances on order books and on past activity. Its is partly offset by a further increase in that on personal expectations.

In chemicals and clothing-textiles, the business climate has fallen back albeit remaining above normal. It is stable in wood-paper and in the “other manufacturing industries”. However, it has improved in rubber and plastic products and in chemicals, reaching its highest level since mid-2011.

Graph 3 – Business climates in a sector-based approach

  • Legend: (C1): Manufacture of food products and beverages - (C3): Machinery and equipment goods - (C4): Manufacture of transport equipment - (C5): Other manufacturing

Table 2 – Business climates in a sector-based approach

Average = 100 and standard deviation = 10 since 1990
Business climates in a sector-based approach
NA* : (A17) et [A38 et A64] Weights** (%) March 17 April 17 May 17
(C1) Man. of food products and beverages 21 101 103 104
(C3) Machinery and equipment goods 11 106 109 110
[CI] Computer, electronic and optical products 3 112 110 115
[CJ] Electrical equipment 3 100 106 107
[CK] Machinery and equipment 5 105 106 107
(C4) Man. of transport equipment 15 106 106 105
[CL1] Motor vehicles, trailers and semi-trailers 7 105 107 106
[CL2] Other transport equipment 8 105 104 103
(C5) Other manufacturing 46 105 108 107
[CB] Textiles, clothing industries, leather and footwear industry 2 106 110 108
[CC] Wood, paper, printing 5 107 106 106
[CE] Chemicals and chemical products 9 105 111 106
[CG] Rubber and plastic products 7 108 108 109
[CH] Basic metals and fabricated metal products 11 101 105 106
[CM] Other manufacturing industries 9 102 101 101
  • * 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 in industry