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Informations Rapides · 6 May 2021 · n° 120
Informations rapidesBusiness managers have consolidated the prospect of a strong recovery in their investment in 2021Industrial 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.

Informations rapides
No 120
Paru le : Paru le 06/05/2021

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.

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 4
2020 -12
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.

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

  • 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.
  • Source: INSEE - Industrial investment survey

After an overall fall in 2020, investment should bounce back strongly in 2021

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.

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 2020 In 2021
Estimate Jan.21 Estimate Apr.21 Forecast Jan.21 Forecast Avr.21
C: Manufacturing Industry -13 -12 10 10
(C1) Manufacture of food products and beverages -6 -5 9 12
(C3) Electrical and electronic equipment ; machine equipment -9 -13 25 27
(C4) Manufacture of transport equipment -23 -18 3 7
[CL1] Motor vehicles -15 -13 5 -2
(C5) Other manufacturing -12 -11 9 7
Total sectors C3 + C4 + C5 -14 -13 10 9
  • * 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 2021 have observed a 12 % fall in nominal investment in 2020 compared with 2019 and forecast a rise of 10% in 2021 compared with 2020.
  • Source: INSEE – Industrial investment survey

The balance of opinion on the expected change in investment over the following half year has exceeded its long-term average

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).

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

As % of total answers, seasonally-adjusted balance
  • Note: this graph illustrates the opinion balances of industrials surveyed for the first time on their past investment over the ongoing half-year and on their expected investment over the following half-year (April and October surveys).
  • Source: INSEE - Industrial investment survey.

In 2020, the share of industrial companies which have scrapped equipment has been historically low

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.

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 1991-2020 2020 (April 2021 survey) Average 1992-2021 2020 (April 2020 survey) 2021 (April 2021 survey)
Change in productive capacity* 29 9 31 22 24
Change in equipment scrapping* 17 11 -2 -4 -7
Share of enterprises reporting equipment scrapping** 74 64 72 46 41
Breakdown of enterprises reporting equipment scrapping**
Wear and tear, obsolescence 53 56 50 58 53
Installation of more efficient equipment 31 26 33 28 30
Shut-down of capacity for old products 11 11 11 10 11
Other scrapping 5 7 6 4 6
  • 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.

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: 26 August 2021 at 8:45 am.

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