Informations Rapides ·
4 February 2021 · n° 034Business managers have forecast a strong recovery in their investment in 2021 in most
industrial sectors Industrial investment survey - January 2021
The business managers in industry surveyed in January 2021 have estimated their investment to have fallen by 13% in nominal terms in 2020 compared to 2019. Thus, they have increased their previous estimate by 1 point, instead of lowering it by 1 point as in average at this time of the year. For the year 2021, they have forecast a strong rebound in their investment expenditures, with a 10% rise in nominal terms. The recovery in investment should be very sharp in the electrical, electronic and machine equipment sector; however it should be tenuous in the transport equipment sector.
The business managers in industry surveyed in January 2021 have estimated their investment to have fallen by 13% in nominal terms in 2020 compared to 2019. Thus, they have increased their previous estimate by 1 point, instead of lowering it by 1 point as in average at this time of the year. For the year 2021, they have forecast a strong rebound in their investment expenditures, with a 10% rise in nominal terms. The recovery in investment should be very sharp in the electrical, electronic and machine equipment sector; however it should be tenuous in the transport equipment sector.
tableauEstimate of the annual nominal change in investment in the manufacturing industry
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 | 4 |
2020 | -13 |
2021 | 10 |
- Note: From 1998 to 2019, the evolution is the value ultimately declared; for 2020 and 2021 the evolution is the estimate from the current survey.
graphiqueEstimate of the annual nominal change in investment in the manufacturing industry
After an overall fall in 2020, investment should bounce back strongly in 2021 in most industrial sectors, except in the transport equipment sector where the recovery should be milder
With an overall decrease of 13% in investment estimated for 2020, business managers in industry have increased by 1 point their October 2020 estimate, whereas they had lowered it by 1 point in average at this time of the year from 2004 to 2020.
All sectors put together, industrialists are expecting a strong recovery in investment in 2021, with a 10% growth in nominal terms. Thus, they have raised their October forecast by 6 points, that is to say 2 points more than the average update at this time of the year.
In 2021, investment should recover markedly in the agri-food industry (a +9% growth expected in 2021 after −6% in 2020) and in the “other manufacturing” sector – textile, chemicals, pharma, metal work, and so on – (+9% expected in 2021 after −12% in 2020). In the electrical, electronic and machine equipment sector, companies are being very optimistic: they have updated their October estimate by 16 points upwards and have forecast a 25% growth in investment, after −9% in 2020. However, the investment of the transport equipment sector should only recover slightly in 2021 (+3% after −23%).
The business managers will revise again their expectations for 2021 over the next quarters: on average since 2003, the forecast issued by companies in January has been 3 points higher than the value ultimately declared in July the year after.
tableauTable 1 – Real annual investment growth in manufacturing industry by major sector%
NA* : (A17) et [A38] | In 2020 | In 2021 | ||
---|---|---|---|---|
Estimate Oct.20 | Estimate Jan.21 | Forecast Oct.20 | Forecast Jan.21 | |
C :Manufacturing Industry | -14 | -13 | 4 | 10 |
(C1) Manufacture of food products and beverages | -7 | -6 | 7 | 9 |
(C3) Electrical and electronic equipment ; machine equipment | -8 | -9 | 10 | 25 |
(C4) Manufacture of transport equipment | -24 | -23 | -2 | 3 |
[CL1] Motor vehicles | -16 | -15 | -7 | 5 |
(C5)Other manufacturing | -13 | -12 | 3 | 9 |
Total sectors C3 + C4 + C5 | -15 | -14 | 3 | 10 |
- * 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 January 2021 observed a 13 % decrease in nominal investment in 2020 compared with 2019 and forecast an increase of 10 % in 2021 compared with 2019.
- Source: INSEE – Industrial investment survey
The balance of opinion on investment for the ongoing half year has straightened up
For the second half of 2020, as many business managers in industry have reported a rise as a fall in their investment as compared to the first half of 2020. The balance of opinion related to the actual change in investment in the ongoing half year has rallied at 0 after –17 in the July survey. It is the second strongest rise in this balance, after the 29 points hike recorded between the second half of 2009 and the first half of 2010.
Many more business managers have anticipated a rise rather than a fall in their investment for the first half of 2021. The balance of opinion related to the expected investment in the ongoing half year has recovered to +14 after +3 in July, and has exceeded its long-term average (+4). This balance has reached its highest level since 2011.
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.
Since the April 2020 survey, the way of dealing with non-response, which consisted in filling missing investment amounts with answers made to previous surveys by non-responding companies, has been modified. Since then, results have been computed on the basis of the sole responding companies.
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: 6 May 2021 at 8:45 am.
Documentation
Methodology 2017 (pdf,147 Ko)
Pour en savoir plus
Time series : Industry – Investment