In August 2017, the business climate in manufacturing improves and reaches its highest level since December 2007Monthly business survey (goods-producing industries) - August 2017

According to the business managers surveyed in August 2017, the business climate in industry has improved. The composite indicator that measures it has increased by 3 points. Already significantly above its long-term average (100), it has reached 111, its highest level since December 2007.

Informations rapides
No 217
Paru le : 24/08/2017
Prochaine parution le : 23/11/2017 at 08:45 - November 2017

According to the business managers surveyed in August 2017, the business climate in industry has improved. The composite indicator that measures it has increased by 3 points. Already significantly above its long-term average (100), it has reached 111, its highest level since December 2007.

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 industrialists' balances of opinion about their production have bounced back

In August 2017, the industrialists' balance of opinion on their past activity has bounced back to its highest level since June 2011; that on personal production expectations has also recovered. Both are significantly above their mean.

Furthermore, business managers remain confident about the general production prospects for the sector. The corresponding balance is virtually stable significantly above its long-term average.

In August 2017, the balances of opinion on global and export order books are virtually stable, significantly above their average.

Finally, almost as industrialists as in July consider that their 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.* May 17 June 17 July 17 Aug. 17
Composite indicator 100 109 109 108 111
Past activity 5 14 11 9 23
Finished-goods inventory 13 5 6 5 4
Global order books –18 –5 –2 –3 –2
Export order books –14 –2 –1 –1 –1
Personal production expectations 5 16 13 11 15
General production expectations –9 7 16 21 20
  • * Long-term average since 1976.
  • Source: INSEE - Monthly business tendency survey in industry

Revisions

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

The overall improvement comes from the manufacture of food products and beverages and from “other manufacturing”

In August, the improvement in the business climate in industry comes from an improvement in the economic outlook in the manufacture of food products and beverages and in “other manufacturing”, partly offset by a downturn in machinery and equipment.

In the manufacture of food products and beverages, the business climate has recovered and has further exceeded its average

In August, the business climate in the manufacture of food products and beverages has regained three points. It stands at 112, which is significantly above normal. This upturn mainly comes from a rebound in the balance of opinion on past activity.

In the manufacture of machinery and equipment goods, the business climate has weakened albeit remaining favourable

In the manufacture of machinery and equipment goods, the business climate has decreased by two points after having reached in July its highest level since March 2008. At 108, it remains significantly above normal. This downturn comes from a decline in the balances of opinion on past activity and on global order books.

The business climate has worsened in machinery and equipment, is virtually stable in the computer, electronic and optical product industry and has kept improving in electrical equipment where it has hit its highest level since November 2010.

The business climate is stable in the manufacture of transport equipment

In the manufacture of transport equipment, the business climate is stable at 109, significantly above its long-term average.

The business climate has improved slightly further in the manufacture of motor vehicles, trailers and semi-trailers while it has been virtually stable in other transport equipment since March 2016.

In “other manufacturing”, the business climate has slightly improved

In “other manufacturing” as a whole, the business climate has increased by one point and has returned to its June level (108), significantly above normal. This slight improvement comes from an upturn in the balances of opinion on past activity and personal production expectations.

In particular, the business climate has returned above average in “other manufacturing industries”, has recovered in basic metals and has slightly improved in clothing-textiles. It is stable in wood-paper and in rubber and plastic products. However it has slightly decreased in chemicals.

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** (%) June 17 July 17 Aug. 17
(C1) Man. of food products and beverages 22 113 109 112
(C3) Machinery and equipment goods 11 109 110 108
[CI] Computer, electronic and optical products 3 113 114 115
[CJ] Electrical equipment 3 106 107 109
[CK] Machinery and equipment 5 107 107 103
(C4) Man. of transport equipment 15 105 109 109
[CL1] Motor vehicles, trailers and semi-trailers 7 105 110 111
[CL2] Other transport equipment 8 104 104 105
(C5) Other manufacturing 46 108 107 108
[CB] Textiles, clothing industries, leather and footwear industry 2 101 105 106
[CC] Wood, paper, printing 5 112 112 112
[CE] Chemicals and chemical products 9 109 109 108
[CG] Rubber and plastic products 7 110 112 112
[CH] Basic metals and fabricated metal products 11 107 103 106
[CM] Other manufacturing industries 9 100 98 101
  • * 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