21 June 2018

2018- n° 157

In June 2018, the business climate is stable at a high level in manufacturing Monthly business survey (goods-producing industries) - June 2018

According to the business managers surveyed in June 2018, the business climate in industry remains at a high level. The composite indicator is stable in June, after having dropped from February to April and recovered slightly in May. At 110, it is well above its long-term average (100). It had reached a seventeen-year peak in January 2018.

The turning-point indicator remains in the uncertainty area.

The balance of industrialists' opinion on personal production expectations has increased for the third month in a row and has reached its highest level since November 2000. However, that on past activity has slipped back in June.

Manufacturers' optimism about the general production prospects for the sector has weakened since the beginning of the year. Nevertheless, the corresponding balance remains well above its long-term average. Their opinion on overall and export order books is virtually stable. The corresponding balances are slightly lower than in January and February when they had reached levels not seen since December 2007.

As many industrialists as in May consider that their finished-goods inventories are above normal. The corresponding balance is below its long-term mean.

As regards employment, the balances of opinion on past and expected workforce size have slightly edged up. The balance on expected workforce size is back to its February and March level, its highest since June 2011.

In the manufacture of food products and beverages, the business climate indicator has increased again in June. At 111, it clearly exceeds its long-term average (100). This improvement mainly comes from an increase in the balances on personal production expectations, overall and export order books.

In the overall manufacture of machinery and equipment goods, the business climate has decreased by one point, at 111, remaining well above its long-term average. This dip is attributable to the decrease in the balances on overall and export order books.

The business climate is less favourable in the computer, electronic and optical product industry and in electrical equipment than in May. By contrast, it has improved again in machinery and equipment where it has reached its highest level since February 2008.

In the manufacture of transport equipment, the business climate has increased by one point. At 109, it is well above its long-term average (100). This improvement mainly comes from the increase in the balance on personal production expectations, in particular in the motor vehicles, trailers and semi-trailers industry.

The business climate indicator has increased in both the manufacture of motor vehicles, trailers and semi-trailers and in the manufacture of other transport equipment. In both sectors, the climate remains well above average.

In overall “other manufacturing”, the business climate has deteriorated. The composite indicator has decreased by 3 points. At 105, it remains however well above its long-term average. This decline mainly comes from the decrease in the balances on past activity and on export order books.

By subsector, the business climate indicator has fallen in rubber and plastic products, chemicals, basic metals and in the “other manufacturing industries”. Conversely, it has slightly increased in wood-paper and clothing-textiles.

The business climate in manufacturing in May 2018 has been raised from 109 to 110 since its first estimation published last month, mainly due to the inclusion of late responses from businesses.