Informations Rapides ·
24 October 2024 · n° 261
In October 2024, industrials have expected a sharp decline in demand Quarterly business survey (goods-producing industries) - October 2024
In October 2024, business leaders in the manufacturing industry have judged more favourably than in July the past evolutions of demand, both global and foreign. However, they have anticipated a sharp decline in demand, both global and foreign, over the next three months. This decline is mostly due to transport equipment manufacturing. Moreover, business leaders have estimated that production bottlenecks have been less restrictive than in July, and hiring difficulties have kept on decreasing, even though they remain quite relevant.
Every three months (in January, April, July and October), the questionnaire of the monthly business survey in the goods-producing industries is enhanced by several questions completing the usual monthly questioning. Answers to these questions are therefore compared to those of three months ago and not to the results of last month, unlike the information presented in the other “Informations Rapides” on the business surveys.
- Past evolution of global demand has been judged more favourably than three months ago, and future evolution less favourably
- Production bottlenecks have decreased
- Hiring difficulties have kept on decreasing
- The cash-flow situation of industrial companies has deteriorated again
- Business leaders have revised downwards their judgment on the evolution of investment in 2024, and their first estimate of the trend for 2025 evolution is even lower
- For further information
In October 2024, business leaders in the manufacturing industry have judged more favourably than in July the past evolutions of demand, both global and foreign. However, they have anticipated a sharp decline in demand, both global and foreign, over the next three months. This decline is mostly due to transport equipment manufacturing. Moreover, business leaders have estimated that production bottlenecks have been less restrictive than in July, and hiring difficulties have kept on decreasing, even though they remain quite relevant.
Past evolution of global demand has been judged more favourably than three months ago, and future evolution less favourably
In October 2024, the balances of opinion on past changes in demand, both global and foreign, have rebounded. Nevertheless, they remain below their long period average. Regarding the three months outlook, balances of opinion on future changes in demand, both global and foreign, have sharply fallen and have gone back below their average. The balance of opinion on the evolution of global demand has reached a level not observed since April 2020. These declines in prospective balances concern especially the sector of transport equipment, even if the sector of “food products and beverages and "other manufacturing" are also impacted.
Production bottlenecks have decreased
In October 2024, the share of industrial companies estimating that they would not be able to increase their production with their current resources if they received more orders, has diminished: at 30%, this proportion has almost gone back to its April level and has moved closer to its long period average. Furthermore, more business leaders than three months ago have deemed their production capacities sufficient given the expected change in orders over the coming months: the associated balance of opinion has rebounded but remains below its average. The production capacity utilisation rate has slightly retreated: at 80%, it has moved a bit away from its average level.
tableauIndustrialists’ opinion: demand and production factors
| Manufacturing industry | Average* | Jan. 24 | Apr. 24 | Jul. 24 | Oct. 24 |
|---|---|---|---|---|---|
| Overall demand | |||||
| Past change | 1 | -5 | -1 | -9 | -4 |
| Expected change | 2 | -6 | 4 | 4 | -8 |
| Foreign demand | |||||
| Past change | 2 | 2 | 7 | -5 | 1 |
| Expected change | 4 | -9 | 12 | 7 | -7 |
| Production factors | |||||
| Production bottlenecks (in %) | 24 | 32 | 29 | 38 | 30 |
| Assessment of productive capacity | 13 | 2 | 7 | 4 | 6 |
| Production capacity utilisation rate (in %) | 83 | 81 | 80 | 81 | 80 |
| Expected change in investments** | 17 | 7 | 18 | 8 | 7 |
- *: Long-term average since 1976, expect for the question on the expected change in investments (since 2021).
- **: Non seasonally adjusted data, as this series has been only collected since 2021.
- The results of the latest survey are preliminary.
- Sources: INSEE – Quarterly business survey in industry
Hiring difficulties have kept on decreasing
In October 2024, the share of companies declaring experiencing hiring difficulties has continued its decline started two years ago. However, these difficulties remain frequent: 45% of business leaders have reported experiencing them, a proportion much higher than the long period average.
The cash-flow situation of industrial companies has deteriorated again
In October 2024, business leaders have judged, on average, that their selling prices have been stable during the third quarter of 2024. For the next three months, they also have anticipated the stability of their selling prices.
The balance on general prospects of change in hourly wages in industry is stable and remains well below its long period average.
The balance of opinion associated with the cash-flow situation of industrial enterprises has decreased for the third quarter in a row.
tableauIndustrialists’ opinion: employment, selling prices and cash-flow
| Manufacturing industry | Average* | Jan. 24 | Apr. 24 | Jul. 24 | Oct. 24 |
|---|---|---|---|---|---|
| Workforce size | |||||
| Hiring difficulties (in %) | 33 | 53 | 52 | 48 | 45 |
| General wages expectations | -38 | -39 | -47 | -55 | -55 |
| Selling prices** and cash-flow | |||||
| Past change in selling prices (in %) | 0.2 | -0.1 | -0.1 | -0.1 | 0.0 |
| Expected change in selling prices (in %) | 0.2 | -0.3 | 0.3 | 0.3 | 0.0 |
| Cash-flow problems*** | -8 | -7 | -8 | -11 | -15 |
- *: Long-term average since 1991 except for cash-flow problems (since 2021).
- **: For the changes in selling-prices, a quantitative question is asked quarterly in the business survey, in addition to the qualitative question asked monthly.
- ***: Non seasonally adjusted data, as this series has been only collected since 2021.
- The results of the latest survey are preliminary.
- Source: INSEE – Quarterly business survey in industry
Business leaders have revised downwards their judgment on the evolution of investment in 2024, and their first estimate of the trend for 2025 evolution is even lower
In the manufacturing industry, fewer business leaders in October 2024 than in April 2024 have estimated that their investments will increase in 2024 compared to 2023. The associated balances of opinion have been revised downwards in the manufacture of machinery and equipment goods as well as in "other manufacturing".
In October 2024, manufacturers have made a first judgment on the expected change in their investments between 2024 and 2025: the associated balance of opinion for 2025 is lower than both the one related to the change of investments in 2024, and the one anticipated for 2024 a year prior. This decline concerns all sub-sectors, but is more marked in the manufacturing of transport equipment.
tableauIndustrialists’ opinion: annual trend in investment
| NA* : (A17) et [A38] | Weights** (%) | Evolution between 2023 and 2024 | Evolution between 2024 and 2025 | ||
|---|---|---|---|---|---|
| October 2023 forecast | April 2024 forecast | October 2024 estimation | October 2024 forecast | ||
| CZ: Manufacturing Industry | 100 | 21 | 20 | 15 | 6 |
| C1: Man. of food products and beverages | 11 | 18 | 14 | 17 | 5 |
| C3: Machinery and equipment goods | 24 | 27 | 26 | 13 | 11 |
| C4: Man. of transport equipment | 22 | 37 | 22 | 33 | 9 |
| C5: Other industries | 43 | 11 | 19 | 6 | 3 |
- *NA: aggregated classification, based on the French classification of activities NAF rév.2.
- ** Weights used to aggregate sub-sectors’ balances of opinion.
- How to read this table: in the October 2024 survey, the balance of opinion of industrialists on the forecasted change in their investment between 2024 and 2025 is +6.
- Source: INSEE – Quarterly business survey in industry
For further information
Quarterly questions, especially as regards demand and production factors, complete the monthly survey published on 24 October 2024.
A balance of opinion is, in most cases, calculated as the difference between the percentage of “increase” responses and the percentage of “decrease” responses.
This survey is part of the Joint Harmonised EU Programme of Business and Consumer Surveys, partly funded by the European Commission.
Additional information (simplified and detailed methodology, nomenclature, etc.) is available on the “Documentation” tab of the web page of this publication.
Answers to this survey have been collected from 27 September to 21 October 2024.
Next issue: 23 January 2025 at 8:45 am.
Documentation
Changes to business tendency surveys – October 2021 (pdf,181 Ko)
Abbreviated methodology (pdf,173 Ko)
Pour en savoir plus
Quarterly questions, especially as regards demand and production factors, complete the monthly survey published on 24 October 2024.
A balance of opinion is, in most cases, calculated as the difference between the percentage of “increase” responses and the percentage of “decrease” responses.
This survey is part of the Joint Harmonised EU Programme of Business and Consumer Surveys, partly funded by the European Commission.
Additional information (simplified and detailed methodology, nomenclature, etc.) is available on the “Documentation” tab of the web page of this publication.
Answers to this survey have been collected from 27 September to 21 October 2024.
Next issue: 23 January 2025 at 8:45 am.