Informations Rapides · 21 July 2022 · n° 187

In July 2022, in the manufacturing industry, hiring difficulties have intensified Quarterly business survey (goods-producing industries) - July 2022

In July 2022, the proportion of industrial enterprises declaring hiring difficulties has reached 67 %, a level unobserved since 1991. Moreover, for the first time since autumn 2020, business leaders are expecting their selling prices to slow down, even if the anticipated growth for the next three months remains clearly positive. Finally, business leaders consider that the demand addressed to them over the past three months has deteriorated but that it could improve in the next quarter, in particular when it comes to foreign demand.

In July, the share of business leaders declaring hiring difficulties has increased again and has reached, at 67 %, a new high point since the series began (1991), while its long-term average lies at 31 %. Moreover, the balance of opinion on the past change in workforce has deteriorated markedly compared to April 2022, while the one the expected change in workforce has barely decreased. Both remain well above their average.

Since the second quarter of 2021, business leaders in the manufacturing industry have been reporting a sharp rise in their selling prices. In July 2022, they have thus estimated it on average at 3.4 % over the last three months, after 3.9 % a quarter earlier. Above all, for the first time since the fall of 2020, business leaders believe that their prices’ growth will be slower over the next months: indeed, they anticipate an increase of 1.4 % on average over the three coming months, while they had forecast a 2.5 % increase in April, which remains a record for this series available since 1991.

The cash-flow situation of industrial enterprises has been deemed a little more favourable than three months ago: the associated balance of opinion has rebounded in July.

In addition, the balance on the general prospects of change in hourly wages in industry has increased for the sixth consecutive quarter. It lies at its highest level since 2001.

Asked about the recent evolution of their competitive position outside the European Union, business leaders say that it could have deteriorated, for the third quarter in a row. The associated balance is now smaller than its average. On the other hand, the competitive position of manufacturers could have improved somewhat on the national market. The associated balance exceeds its average. At the European Union level, the competitive position of manufacturers would be stable.

The opinion of business leaders on the past change in demand has deteriorated. The balance of opinion associated with the change in global demand over the past three months has clearly deteriorated again, while the one on foreign demand has barely decreased. On the contrary, the opinion of business leaders about the expected change in demand has improved, distinctly, as well in terms of global demand as of foreign demand. The general exportation prospects have brightened slightly, but the associated balance of opinion remains below its average.

In July 2022, the production capacity utilisation rate has been stable at 82 % slightly below its average level. The share of enterprises claiming they would not be able to increase their production with their current means if they received more orders has diminished for the second quarter in a row, to 43 %. However, this proportion remains well above its average level. In addition, a few more business leaders than in the previous quarter consider their production capacity to be sufficient given the expected change in orders over the coming months. The associated balance of opinion remains below its average level.

The balance of opinion on the expected change in investment over the next three months, introduced in this survey in October 2021, has carried on with its recovery and has moved away from its average after having fallen at the start of the year.