Insee conjoncture

In October 2017, the business climate in manufacturing stabilises at its highest level since December 2007Monthly business survey (goods-producing industries) - October 2017

According to the business managers surveyed in October 2017, the business climate in industry remains stable. At 111, it stands at its highest level since December 2007.

Informations rapides N° 275
No 275
Principaux indicateurs
Paru le : 24/10/2017
Prochaine parution le : 25/09/2018 at 08:45 - September 2018

According to the business managers surveyed in October 2017, the business climate in industry remains stable. At 111, it stands at its highest level since December 2007.

Graph 1 – Business climate in industry - Composite indicator

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

Graph 2 – Turning-point indicator

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

Manufacturers are very upbeat about general production prospects, somewhat less about their own perspectives

The balance of opinion on past activity, already significantly above its average in September, is back on track. The one about their personal production expectations has dipped but remains well above its long-run average.

Manufacturers are increasingly optimistic about general production prospects for the sector. The corresponding balance has continued to rise and reached its highest level since October 2000.

The balances on overall and export order books are virtually stable in October, standing at their highest point since March 2008.

Lastly, more industrialists than in September consider that their finished-goods inventories are above normal: the corresponding balance nevertheless remains well below its long-term mean.

Table 1 – Industrialists' opinion on manufacturing activity

Balance of opinion, in %
Industrialists' opinion on manufacturing activity
Manufacturing industry Ave.* July 17 Aug. 17 Sept. 17 Oct. 17
Composite indicator 100 108 111 111 111
Past activity 5 9 21 12 16
Finished-goods inventory 13 5 4 3 6
Overall order books –18 –3 –3 0 0
Export order books –14 –1 0 1 2
Personal production expectations 5 11 14 20 17
General production expectations –8 21 20 23 31
  • * Long-term average since 1976.
  • Source: INSEE - Monthly business tendency survey in industry

Revisions

The business climate in manufacturing in September 2017 has been slightly raised since its first estimation last month, from 110 to 111, mainly due to the inclusion of late responses from businesses.

In the food and beverage production industry, the business climate has picked up

The business climate in the manufacture of food products and beverages has increased by four points in October, after a decline in the previous month. At 111 it is well above its long-term average. This upturn mainly comes from a sharp rise in the balance of opinion on past activity, and to a lesser extent, on global order books.

The business climate has further improved in the manufacture of machinery and equipment goods

In the overall manufacture of machinery and equipment goods, the business climate has continued to expand significantly above its mean. This improvement is mainly due to a rebound in the balance on export orders.

The business climate has improved in electrical equipment and in machinery and equipment. It remains steady in the computer, electronic and optical product industry.

The business climate remains stable in the transport equipment manufacture

In the transport equipment manufacture, the business climate holds steady at 109 for the fourth month in a row, well above its long-term average. The decrease in the balances of opinion on order books has been offset by the rise in that on past activity, due to motor vehicles.

The business climate has improved in the manufacture of motor vehicles, trailers and semi-trailers while it has inched down in other transport equipment.

The business climate in “other manufacturing industries” reached a level unseen since the end of 2007

In overall “other manufacturing”, the business climate has improved and reached its highest level since the end of 2007. This expansion has been driven by an increase in the balance of opinion on past activity and on global and export order books.

In particular, the business climate indicator has brightened in “other manufacturing industries”, basic metals and clothing-textiles. It is stable in rubber and plastic products and virtually stable in chemicals. In contrast it has edged down in wood-paper, returning to its August level.

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** (%) Aug. 17 Sept. 17 Oct. 17
(C1) Man. of food products and beverages 22 110 107 111
(C3) Machinery and equipment goods 11 107 108 110
[CI] Computer, electronic and optical products 3 112 112 112
[CJ] Electrical equipment 3 108 103 107
[CK] Machinery and equipment 5 103 106 109
(C4) Man. of transport equipment 15 109 109 109
[CL1] Motor vehicles, trailers and semi-trailers 7 111 111 112
[CL2] Other transport equipment 8 104 105 104
(C5) Other manufacturing 46 108 109 111
[CB] Textiles, clothing industries, leather and footwear industry 2 103 105 107
[CC] Wood, paper, printing 5 111 113 111
[CE] Chemicals and chemical products 9 109 109 108
[CG] Rubber and plastic products 7 112 114 114
[CH] Basic metals and fabricated metal products 11 105 106 109
[CM] Other manufacturing industries 9 104 104 110
  • * NA: aggregated classification, based on the French classification of activities NAF rév.2.
  • ** Weights used to aggregate sub-sectors balances of opinion.
  • Source: INSEE - Monthly business tendency survey in industry