Informations Rapides · 22 July 2021 · n° 185

In July 2021, demand in the industrial sector have strengthened while supply difficulties have increased Quarterly business survey (goods-producing industries) - July 2021

The business managers surveyed in July 2021 have indicated that demand received over the past three months has again intensified. Whereas the balances of opinion on the past change in demand, overall or foreign, had fallen back below their average in January 2021, they are now far outreaching it. Likewise, the business managers have anticipated an increase in demand that will be directed to them over the next three months. The associated balances have grown vigorously and reached levels well above their long-term averages. Therefore, the proportion of companies declaring demand difficulties has continued to decline.

In July 2021, more business managers than in April are experiencing supply difficulties preventing them from increasing their production as they would like. The proportion of companies declaring difficulties of supply only has further risen and has reached a level not seen since the end of 2000. The branch of machinery and equipment goods as well as the industry of motor vehicles, trailers and semi-trailers have been the most affected by these difficulties. In particular, the balance on sourcing difficulties, which had already reached an all-time high last month, has grown vigorously.

The production capacity utilisation rate has strengthened again. At 82%, it has almost matched its average (83%). As in April 2021, this indicator has been undermined by the manufacture of transport equipment, where it is still lying well below its long-term average.

Fewer and fewer manufacturers are considering their current production capacity as sufficient given their current order books and their demand expectations: the associated balance has fallen very sharply and has slipped well below its long-term average. Production bottlenecks are increasingly becoming a matter of importance: 40% of manufacturers have reported some, a share that has risen sharply compared to the previous quarter and well above its average.

Manufacturers had already reported a sharp increase in their selling prices during the first quarter; they have confirmed this trend in July. Thus, selling prices in industry may have increased over the last three months by +1.5% on average. This indicator has remained well above its average since 1991 (+0.1%). Likewise, manufacturers are anticipating a further increase in their selling prices over the next three months (+0.8%, that is to say the same forecast as in the previous quarter). In addition, the proportion of companies experiencing cash flow difficulties has been virtually stable and remains lower than on average.

The balances relating to the change in workforce size over the last and next three months have increased sharply, and are very clearly surpassing their long-term average. The balance on the expected change in workforce size has even gone up to a level unseen since the start of 2011. At the same time, the proportion of business leaders experiencing recruitment difficulties has grown again and is now standing at 44%, well above its average (30%).

The three balances relating to the competitive position in France, within the European Union and outside the European Union have continued to recover. The balance on the competitive position inside the European Union is the last among the three of them to return above its average. In addition, the overall export outlook is deemed dynamic: the associated balance has grown sharply since the start of the year and stands now well above its average.