7 May 2020
N° 2020-116

Business managers in manufacturing industry are expecting their investment to fall in 2020Industrial investment survey - April 2020

The business managers in industry surveyed in April 2020 have anticipated a fall in their investment of 7% in nominal terms in 2020 as compared to 2019. Thus, they have lowered by 10 points their estimate given last January, whereas on average the revision in April is zero. For the year 2019, business managers have estimated their investment to have grown by 3% in nominal terms as compared to 2018.

Informations rapides
No 116
Paru le : Paru le 07/05/2020
Prochaine parution le : 27/08/2020 at 08:45 - July 2020
Informations rapides  No 116 - May 2020
Warning

Given the context of the fight against the spread of COVID-19, the statistics published in this issue of Informations Rapides may be less accurate than usual. Companies’ answers were collected between 25 March and 5 May 2020, during general lockdown, solely online and without any reminder. Consequently, the response rate is lower this quarter than usual.

For this issue, the way of dealing with non-response on the questions about investment amounts has been modified: the growth rates of investment have been estimated using solely the answers to the April 2020 survey. Indeed, the treatment of non-response usually relies on the previous statements of the companies which have not answered the ongoing survey. This method would have carried forward investment expectations from January 2020, before the health crisis.

The business managers in industry surveyed in April 2020 have anticipated a fall of their investment of 7% in nominal terms in 2020 as compared to 2019. Thus, they have lowered by 10 points their estimate given last January, whereas on average the revision in April is zero. For the year 2019, business managers have estimated their investment to have grown by 3% in nominal terms as compared to 2018.

Estimate of the annual nominal change in investment in the manufacturing industry

in %
Estimate of the annual nominal change in investment in the manufacturing industry (in %)
Annual nominal change in investments
1998 6
1999 4
2000 9
2001 2
2002 -9
2003 -8
2004 1
2005 -4
2006 6
2007 6
2008 1
2009 -21
2010 1
2011 12
2012 5
2013 -5
2014 3
2015 2
2016 5
2017 5
2018 2
2019 3
2020 -7
  • Note: From 1998 to 2018, the evolution is the value ultimately declared; for 2019 and 2020 the evolution is the estimate from the current survey.

Estimate of the annual nominal change in investment in the manufacturing industry

  • Note: From 1998 to 2018, the evolution is the value ultimately declared; for 2019 and 2020 the evolution is the estimate from the current survey.
  • Source: INSEE - Industrial investment survey.

For 2019, business managers have updated upwards their investment estimate

Business managers have estimated the overall rise of their investment at 3% in 2019. Thus, they have slightly updated upwards their January 2020 estimate.

In 2019, investment is likely to have receded in the agri-food industry (-6% after +1% in 2018) and remained stable in the sector of electrical, electronic and machine equipment after two bright years (+25% in 2017 and +8% in 2018). Investment in the “other manufacturing” sector appears to have kept its 2018 pace (+4%). However, investment in the transport equipment sector is likely to have bounced markedly (+13%) after two years of clear decrease (-8% in 2017 and -5% in 2018).

Business managers are expecting a fall in their investment in 2020

For the year 2020, business managers have forecasted an average fall of 7% in nominal terms in their investment compared to 2019. Investment should fall drastically in the transport equipment sector (-16%). The decline in investment in the “other manufacturing” sector and in the agri-food industry should not be as severe (-7% for the former, -3% for the latter). At last, investment in the equipment good sector is likely to remain stable.

Industrialists thus have lowered their January estimate for 2020 by 10 points.

The business managers’ estimate for 2020 may be revised over the next quarters. On average since 2003, the forecast issued in April has been 4 points above the value ultimately declared in July of the following year.

Estimate of the nominal annual investment growth in manufacturing industry by major sectorIn %

Estimate of the nominal annual investment growth in manufacturing industry by major sector
NA*: (A17) et [A38] In 2019 In 2020
Estimate Jan.20 Estimate Apr.20 Forecast Jan.20 Forecast Avr.20
C: Manufacturing Industry 1 3 3 -7
(C1) Manufacture of food products and beverages -5 -6 7 -3
(C3) Electrical and electronic equipment ; machine equipment 1 1 9 1
(C4) Manufacture of transport equipment 8 13 -6 -16
[CL1] Motor vehicles 15 21 -2 -6
(C5) Other manufacturing 0 3 4 -7
Total sectors C3 + C4 + C5 2 5 2 -7
  • * The codes correspond to the level of aggregation (A17) and [A38] of the "NA" aggregate classification based on NAF rev.2.
  • How to read this table: In the manufacturing industry, firms surveyed in April 2020 observed a rise in nominal investment in 2019 compared with 2018 and forecast a fall of 7% in 2020 compared with 2019.
  • Source: INSEE – Industrial investment survey

The balance of opinion about investment planned for the next semester has fallen

The industrialist’ balance of opinion related to investment change over the past half-year has lost 18 points for the first semester 2020 as compared to the second semester 2019, and now lies at -10.

In addition, for the second semester 2020, the balance of opinion regarding investment in the next half-year has last 15 points as compared to the balance for the first semester 2020 calculated in October 2019, and now stands at -9.

Opinion of industrialists regarding six-month change in investment (first estimate)

Opinion of industrialists regarding six-month change in investment (first estimate)
Forecast for the following semester
2003-S1 7.8
2003-S2 1.0
2004-S1 3.0
2004-S2 4.3
2005-S1 -6.0
2005-S2 12.1
2006-S1 1.3
2006-S2 12.2
2007-S1 2.9
2007-S2 9.9
2008-S1 8.5
2008-S2 10.7
2009-S1 0.0
2009-S2 -18.1
2010-S1 -11.9
2010-S2 5.4
2011-S1 9.1
2011-S2 19.1
2012-S1 5.8
2012-S2 1.3
2013-S1 -4.9
2013-S2 0.7
2014-S1 -1.9
2014-S2 14.8
2015-S1 -0.3
2015-S2 10.5
2016-S1 2.6
2016-S2 15.3
2017-S1 5.8
2017-S2 11.5
2018-S1 10.2
2018-S2 10.9
2019-S1 12.5
2019-S2 3.9
2020-S1 5.8
2020-S2 -9.0
  • Note: this graph illustrates the opinion balances of industrials surveyed for the first time on their expected investment for the following semester (April and October surveys)

Opinion of industrialists regarding six-month change in investment (first estimate)

  • Note: this graph illustrates the opinion balances of industrials surveyed for the first time on their expected investment for the following semester (April and October surveys)
  • Source: INSEE - Industrial investment survey.

Industrialists would lengthen the use of their equipments in 2020

The balance of opinion regarding the variation in productive capacity in the year to come has stepped back markedly. Furthermore, the share of companies expecting to downgrade equipment in 2020 has strongly diminished, which could signal that industrialists intend to keep longer than usual their current equipment.

The share of companies declaring to have downgraded equipment in 2019 is already lower than its average. Likewise, the balance of opinion on the observed change in productive capacity in 2019 is already lower than its average.

Productive capacity and equipment scrapping

* Balance of opinion, as % of responses - ** in %
Productive capacity and equipment scrapping (* Balance of opinion, as % of responses - ** in %)
Observed Forecast
Average 1991-2019 2019 (April 2020 survey) Average 1992-2020 2019 (April 2019 survey) 2020 (April 2020 survey)
Change in productive capacity* 30 28 31 34 22
Change in equipment scrapping* 17 2 -2 1 -4
Share of enterprises reporting equipment scrapping** 75 69 73 66 46
Breakdown of enterprises reporting equipment scrapping**
Wear and tear, obsolescence 53 60 50 55 58
Installation of more efficient equipment 31 30 33 36 28
Shut-down of capacity for old products 11 9 11 7 10
Other scrapping 5 1 6 2 4
  • Source: INSEE – Industrial investment survey

For more information

The Survey results provide a picture of investment conditions in the industrial market sector. Investment in this sector, plays a key role as an engine of economic change, but accounts for only about a quarter of productive investment in France.

Reference: Insee Méthodes n°119 « The French survey on industrial investment: methodology ». Additional information (simplified and detailed methodology, nomenclature, etc.) is available on the “Documentation” tab of the web page of this publication.

Next issue: 27 August 2020.


: bureau-de-presse@insee.fr
: