Informations Rapides · 6 May 2021 · n° 120

Business managers have consolidated the prospect of a strong recovery in their investment in 2021 Industrial investment survey - April 2021

The business managers in industry surveyed in April 2021 have estimated their investment to have fallen by 12% in nominal terms in 2020 compared to 2019. For the year 2021, they have planned a strong rebound in their investment expenditures, with a 10% rise in nominal terms, thus maintaining their January forecast. The recovery in investment should be very sharp in the electrical, electronic and machine equipment sector.

With an overall decrease of 12% in investment estimated for 2020, business managers in industry have increased by 1 point their January 2020 estimate, as in average at this time of the year since 2004.

All sectors put together, industrialists are expecting a strong recovery in investment in 2021, with a 10% growth in nominal terms. Thus, they have confirmed their January forecast, as in average for the April surveys since 2004.

In 2021, investment should recover markedly in the agri-food industry and quite markedly in the “other manufacturing” sector – textile, chemicals, pharma, metal work, and so on. In the electrical, electronic and machine equipment sector, companies are being particularly optimistic: they have forecast a 27% growth in investment, surpassing the setback from the year before (−13%). The investment of the transport equipment sector should recover as well but without offsetting its sharp drop of 2020 (+7% after −18%).

Business managers will revise again their expectations for 2021 over the next quarters: on average since 2004, the forecast issued by companies in April has been 4 points higher than the value ultimately declared in July the year after.

For the first half of 2021, business managers in industry have reported in average a rise in their investment as compared to the second half of 2020. The balance of opinion related to the actual change in investment in the ongoing half year has risen to +15, after having joined its average level in October (+7).

More business managers have anticipated a rise rather than a fall in their investment for the second half of 2021. The balance of opinion related to the expected change in investment in the following half year has improved again to +7 after +1. This balance has overcome as well its long-term average (+5).

The balance of opinion on the expected change in productive capacity for the ongoing year has bounced back slightly in 2021. The share of companies forecasting equipment scrapping has diminished again in 2021, after a momentous fall in 2020: this year once more, industrialists are planning to retain longer than usual their current equipment. However, the caution expressed in April last year has been somewhat disproved: whereas only 46% of the companies surveyed in April 2020 were planning to scrap equipment throughout the year, almost two thirds have reported to have actually scrapped some in 2020.

This share of companies reporting equipment scrapping has nevertheless declined to its lowest level since the series started. The balance of opinion on the observed change in productive capacity has plummeted as well in 2020 to a record low.