Informations Rapides ·
23 January 2025 · n° 18
In January 2025, investment prospects in the industry have strongly deteriorated Quarterly business survey (goods-producing industries) - January 2025
In January 2025, business leaders in manufacturing industry have estimated that demand has been less dynamic over the last three months. However, they are slightly less pessimistic than in October about the future evolution of foreign demand. Besides, they are much more pessimistic about the future evolution of their investments: the corresponding balance now sits at its lowest in more than three years.
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.
- According to business leaders, demand for industrial products has been weaker in the last quarter
- The share of companies at the limit of their production capacity has increased
- Investment prospects have strongly deteriorated
- Hiring difficulties have continued to decline
- General prospects for changes in hourly wages have deteriorated again
- For further information
In January 2025, business leaders in manufacturing industry have estimated that demand has been less dynamic over the last three months. However, they are slightly less pessimistic than in October about the future evolution of foreign demand. Besides, they are much more pessimistic about the future evolution of their investments: the corresponding balance now sits at its lowest in more than three years.
According to business leaders, demand for industrial products has been weaker in the last quarter
In January 2025, the balances of opinion on past change in demand, both global and foreign, have retreated. Both have moved away from their average. However, the balance of opinion relating to the expected change in global demand is stable and the one relating to the expected change in foreign demand has rebounded. Both are well below their respective average.
The share of companies at the limit of their production capacity has increased
The share of industrial companies reporting to be at the limit of their production capacity has rebounded in January 2025, mainly due to the sector of “other transport equipment” manufacturing: 37% have deemed that they would not be able to increase their production with their current means if they received more orders, against 31% in October 2024. This proportion is well above its average. Slightly more business leaders than three months ago consider their production capacities sufficient given the expected change in orders over the coming months: the associated balance of opinion has slightly increased again but remains below its long-period average. The production capacity utilisation rate is stable: at 80%, it remains under its average level.
Investment prospects have strongly deteriorated
The balance of opinion on the expected change in investment over the next three months has sharply dropped and has reached its lowest level since the beginning of this series, in October 2021.
tableauIndustrialists’ opinion: demand and production factors
| Manufacturing industry | Average* | Apr. 24 | Jul. 24 | Oct. 24 | Jan. 25 |
|---|---|---|---|---|---|
| Overall demand | |||||
| Past change | 1 | -1 | -9 | -4 | -7 |
| Expected change | 2 | 4 | 4 | -7 | -7 |
| Foreign demand | |||||
| Past change | 2 | 7 | -5 | 1 | -1 |
| Expected change | 4 | 12 | 7 | -7 | -3 |
| Production factors | |||||
| Production bottlenecks (in %) | 24 | 29 | 38 | 31 | 37 |
| Assessment of productive capacity | 13 | 7 | 4 | 5 | 6 |
| Production capacity utilisation rate (in %) | 83 | 80 | 81 | 80 | 80 |
| Expected change in investments** | 16 | 18 | 8 | 7 | -1 |
- *: 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.
- Source: INSEE – Quarterly business survey in industry.
Hiring difficulties have continued to decline
In January 2025, the share of companies reporting encountering recruitment difficulties has continued its decline began in October 2022. These difficulties remain however frequent: 43% of business leaders have reported experiencing them, a proportion that remains much higher than the long-term average.
General prospects for changes in hourly wages have deteriorated again
In January 2025, the balance of opinion on the general prospects for changes in hourly wages in the manufacturing industry has continued its almost uninterrupted decline for two years, and has moved even more away from its long-term average: it has thus reached a level not seen since 2016 (excluding COVID-19 pandemic).
Business leaders have reported, on average, that their selling prices have increased by 0.1% over the last three months. For the next three months, business leaders anticipate a slight decrease in their selling prices (-0.1%).
The cash position of industrial companies is considered better compared to October: the associated balance has rebounded and has returned to its average.
tableauIndustrialists’ opinion: employment, selling prices and cash-flow
| Manufacturing industry | Average* | Apr. 24 | Jul. 24 | Oct. 24 | Jan. 25 |
|---|---|---|---|---|---|
| Workforce size | |||||
| Hiring difficulties (in %) | 33 | 52 | 48 | 46 | 43 |
| General wages prospects | -38 | -47 | -55 | -55 | -63 |
| Selling prices** and cash-flow | |||||
| Past change in selling prices (in %) | 0.2 | -0.1 | -0.1 | 0.5 | 0.1 |
| Expected change in selling prices (in %) | 0.2 | 0.3 | 0.3 | 0.0 | -0.1 |
| Cash-flow problems*** | -8 | -8 | -11 | -16 | -8 |
- *: 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.
For further information
Quarterly questions, especially as regards demand and production factors, complete the monthly survey published on 23 January 2025.
A balance of opinion is 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 26 December 2024 to 20 January 2025.
Next issue: 25 April 2025 at 8:45 am.
Pour en savoir plus
Quarterly questions, especially as regards demand and production factors, complete the monthly survey published on 23 January 2025.
A balance of opinion is 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 26 December 2024 to 20 January 2025.
Next issue: 25 April 2025 at 8:45 am.