Informations Rapides · 22 July 2021 · n° 184

In July 2021, the business climate in the industry has kept improving Monthly business survey (goods-producing industries) - July 2021

According to the industry business managers surveyed in July 2021, the business climate has improved again: it has gained two points compared to last month. At 110, its highest level since April 2018, it is lying well above its long-term average (100). Three balances of opinion on the rise have participated in the business climate improvement: the balances of opinion on the overall and foreign order books, as well as the balance on the personnal production expectations. However, the decrease in the general production prospects has somewhat curbed this progress. In addition, the balance on the expected trend in selling prices has fallen back after five months of sustained increase.

In July 2021, the balances of opinion on order books have increased, more distinctly than last month. The balance on the foreign order books has returned above its long-term average, for the first time since January 2020. The balance on the overall order books has pulled further away from its own average.

Manufacturers are also being optimistic about their own production for the next three months. The balance on the expected production has increased significantly and further exceeded its average. The balance on the production over the last three months has been virtually stable at a level well above its long-term average.

More business leaders have considered their inventory level lower than usual, the balance of opinion relative to the finished-goods inventories has therefore clearly decreased. On an overall declining trend since the year started, it has now reached its lowest level since April 2010. This month, this decline has been especially pronounced in the branch of "other transport equipment", whereas the balance of opinion on the finished-goods inventories had been very high in this branch over the last months.

Regarding employment, the business managers' perception of the development in their workforce size has continued to improve. The balances of opinion on the past change and on the expected change in staff size have again increased and stand well above their average.

However, the business managers have tempered their expectations about the general outlook of production in the good-producing industries. Whereas the balance had jumped the past two months, it has shrunk this month. However, it has remained well above his average.

The balance of opinion on the expected trend in selling prices has significantly slipped back in July 2021, while remaining well above its average. It had risen sharply since February and reached in June a level unseen since the series started (1990). However, many more manufacturers than usual are anticipating an overall increase in the prices of industrial products over the next three months.

In the manufacture of food products and beverages, the business climate has shrunk in July 2021. The balance on personal production prospects has declined again there. Nevertheless, the business climate of the branch is still well above its average level.

The business climate in the branch of machinery and equipment goods has further slowly risen and stands now at a very high level. The balances on order books have pulled this climate upwards. However, the balance on the personal production prospects has fallen quite noticeably.

In the manufacture of transport equipment, where the situation appears clearly deteriorated compared to the rest of the manufacturing industry, the business climate has improved somewhat. Indeed, the climate in the branch of motor vehicles, trailers and semi-trailers has picked up slightly, driven by the balance on the level of the overall order-books and to a lesser extent by the personal production prospects. In the branch known as other transport equipment, the climate has also improved, thanks to the improvement in the balances on order books.

Finally, the business climate has also improved in the branch known as "other manufacturing". In this branch, the balance on the foreign order books has driven most of this enhancement. The improvement in the climate has been particularly pronounced in the manufacture of textiles, clothing , leather and footwear.