27 August 2020
2020- n° 210Business managers in manufacturing industry have lowered further their investment
forecast for 2020 Industrial investment survey - July 2020
The business managers in industry surveyed in July 2020 have reported their investment to have risen by 4% in nominal terms in 2019. For the year 2020, business managers have anticipated an 11% fall in their investment expenditures in nominal terms as compared to 2019. Thus, they have lowered their previous forecast by 4 points, while the average revision at this time of the year is −2 points.
The companies’ answers to this survey have been collected in July 2020, that is to say after the lockdown's end. Consequently, the answer rate is significantly higher than the one of the previous survey, carried on in April, nevertheless it does not catch up with the answer rate of the surveys before the lockdown.
Besides, the way of dealing with non-response to the questions about investment amounts has been modified since the April 2020 survey. From now on, the growth rates of investment are estimated on the basis of the answers made to the ongoing survey only, whereas answers made to previous surveys used to be imputed to missing investment amounts from non-responding companies.
The business managers in industry surveyed in July 2020 have reported their investment to have risen by 4% in nominal terms in 2019. Thus, they have increased their April estimate by one point, as in average at this time of the year. For the year 2020, business managers have anticipated an 11% fall in their investment expenditures in nominal terms as compared to 2019. Thus, they have lowered their previous forecast by 4 points, while the average revision at this time of the year is −2 points.
tableauEstimate of the annual nominal change in investment in the manufacturing industry
|Annual nominal change in investments|
- Note: From 1998 to 2019, the evolution is the value ultimately declared; for 2020 the evolution is the estimate from the current survey.
graphiqueEstimate of the annual nominal change in investment in the manufacturing industry
For 2020, business managers have downgraded their investment forecast again
With an overall decrease of 11% in investment expected for 2020, business managers have lowered by 4 points their April 2020 estimate, twice as much as usually at this time of the year from 2004 to 2018. However, they have updated upwards their estimate of the investment growth rate in 2019 by one point, as usual at this time of the year, thus bringing it to +4%.
In the agri-food industry and in the electrical, electronic and machine equipment sector, 2019 investment amounts have been updated upwards on average. The 2020 investment forecast has been downgraded in every sub-sector, most notably in the electrical, electronic and machine equipment sector (growth rate updated from +1% to −5%) and in the transport equipment sector (update from −16% to −20%). The agri-food industry has registered the slightest revision (from −3% to −5%).
The business managers’ estimate for 2020 should be revised over the next quarters; on average since 2003, the forecast issued in July has been 2 points higher than the value ultimately declared in July of the following year.
tableauEstimate of the nominal annual investment growth in manufacturing industry by major sectorIn %
|NA*: (A17) et [A38]||In 2019||In 2020|
|Estimate Apr.20||Estimate July20||Forecast Apr.20||Forecast July20|
|C: Manufacturing Industry||3||4||-7||-11|
|(C1) Manufacture of food products and beverages||-6||-3||-3||-5|
|(C3) Electrical and electronic equipment ; machine equipment||1||5||1||-5|
|(C4) Manufacture of transport equipment||13||14||-16||-20|
|[CL1] Motor vehicles||21||21||-6||-10|
|(C5) Other manufacturing||3||3||-7||-10|
|Total sectors C3 + C4 + C5||5||6||-7||-12|
- * 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 4 % rise in nominal investment in 2019 compared with 2018 and forecast a fall of 11% in 2020 compared with 2019.
- Source: INSEE – Industrial investment survey
The balance of opinion on investment in the ongoing semester has kept close to its average
For the first half of 2020, many more business managers in industry have reported a fall rather than a rise in their investment as compared to the second half of 2019. The balance of opinion related to the change in investment in the past half-year has receded strongly (–17 after +1), far below its long-term average (+7).
Business leaders have remained more numerous to anticipate a rise rather than a fall in their investment for the second half of 2020 as compared to the first half of the year. Nevertheless, the balance of opinion related to the expected investment in the ongoing semester has dropped to +3, after +8 in the January survey, a level close to its long-term average (+4).
graphiqueOpinion of industrials regarding six-month change in investment (second estimate)
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: 5 November 2020 at 8:45 am.
Methodology 2017 (pdf, 147 Ko )