Informations Rapides · 20 January 2022 · n° 13

In January 2022, the business climate in manufacturing industry has improved a little again Monthly business survey (goods-producing industries) - January 2022

According to the business managers surveyed in January 2022, the business climate in manufacturing industry has improved a little again compared to the previous month. At 112, the composite indicator has gained two points and remains well above its average (100). It has been carried by the rebound in the balances of opinion on the order books and, to a lesser extent, by the rise in the balance on past production. Conversely, the balance on the personal production prospects has dragged the business climate down. In addition, the balance of opinion on the expected trend in selling prices has clearly withdrawn while remaining at a high level.

In January 2022, the balances on the level of order books have sharply bounced back after having very distinctly decreased in December. The balance on overall order books as well as the one on foreign order-books have hit their highest level since spring 2018.

Yet business managers are less optimistic than in the previous month about the overall production prospects of the French manufacturing industry: the related balance has clearly diminished this month, while staying well above its average.

The business managers have reported feeling less economic uncertainty regarding the future of their enterprise. The related balance, which had quite strongly increased last month, has diminished just as promptly to the point of reaching its lowest level since these series were published.

The balance on the expected change in selling prices has clearly withdrawn this month. It had grown very sharply since the beginning of the year 2021, reaching record levels at the end of the year.

The balance of opinion on expected production over the next three months has withdrawn in every sector apart from the manufacture of transport equipment. Thus, it has diminished for the whole manufacturing industry but remains well above its long-term average. Conversely, the balance of opinion on production in the past three months has improved quite distinctly. While it was already very high, this balance has even reached its highest point since 2011.

The balance on the level of the finished-goods inventories has risen for the second month in a row, even though it remains by quite far below its average. Fewer business managers than in December have reported their inventories to be lower than usual.

Finally, concerning employment, the balance of opinion on the past variation in the workforce size has increased a little, while the one on the expected variation has remained almost unchanged. Both of them exceed by a lot their respective long-term average.

The business climate is superior to 100, its long-term average, in all the main industrial sub-sectors.

However, in the manufacture of food products and beverages, the business climate has sharply withdrawn. It has lost five points, mainly because of a large fall in the balances on order books and on the personal production prospects.

In the so called “other industries”, the climate has deteriorated a little, while remaining well above its average. In this sector, the balances on order books as well as those on the personal production prospects have decreased.

The business climate of the machinery and equipment goods industries has been stable, well above its average. The balances on the overall as well as the foreign order books have improved. The one on the personal production prospects has withdrawn after having reached a high point in December.

Finally, in the manufacture of transport equipment, the business climate has significantly bounced back and has exceeded its average. However, a particularly low response rate this month in this sub-sector calls for caution in interpreting the results.

The business climate in manufacturing industry in December 2021 has been revised downwards by one point, due to the inclusion of late responses from some companies.