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In April 2024, business leaders expect a clear rebound in demand, especially from abroad. They also see a slight increase in demand for industrial products in the previous quarter. Finally, production bottlenecks and recruitment difficulties in the industry have slightly decreased, but remain severe.
Demand for industrial products, especially foreign demand, is seen as more robust than three months ago.
In April 2024, business leaders’ views on changes in global and foreign demand over the past and next three months improved. The balance of opinions related to expected changes in demand rebounded significantly, especially the balance related to foreign demand. The latter has returned significantly above the average, and the balance of opinions related to expected global demand has also returned to slightly above the average. In terms of past demand, the balance of opinions related to global demand and foreign demand has rebounded. The balance of opinions related to global demand has approached the average, and the balance of opinions related to foreign demand has deviated from the average.
Production bottlenecks have been reduced, but remain severe
In April 2024, the proportion of companies with production capacity at the limit (production bottleneck) decreased, but it is still above the long-term average: 30% of companies believe that if they receive more orders, they will not be able to increase production with existing means. In addition, taking into account the expected changes in orders in the coming months, more company leaders believe that their production capacity is sufficient than three months ago. The balance of opinions has rebounded significantly and is close to the average. The utilization rate of production capacity has decreased slightly: 80% has deviated from the average.
The balance of opinion on changes in investment expectations over the next three months has rebounded and returned to above average.
GraphicsThe Industrialist’s View: Demand and Factors of Production
Balance of opinion, expressed as % SA
| manufacturing | Average* | July 23 | October 23 | January 24 | April 24 |
|---|---|---|---|---|---|
| Total demand | |||||
| Past changes | 1 | 0 | -2 | -5 | -3 |
| Expected changes | 2 | -4 | 0 | -4 | 3 |
| Foreign demand | |||||
| Past changes | 2 | 4 | 7 | 4 | 6 |
| Expected changes | 4 | -1 | 4 | -8 | 12 |
| Production Factors | |||||
| Production bottleneck (%) | twenty four | Thirty-four | Twenty-nine | 33 | thirty |
| Production capacity assessment | Thirteen | 5 | 9 | -1 | 8 |
| Capacity utilization(%) | 83 | 80 | 81 | 81 | 80 |
| Expected investment changes** | 19 | 20 | twenty one | 7 | 20 |
- *: Long-term averages since 1976, except for the question on expected changes in investment (from 2021).
- **: Data are not seasonally adjusted as the series is only collected from 2021 onwards.
- The results of the latest survey are preliminary.
- Source: INSEE – Quarterly Business Survey by Industry
Hiring Difficulty Declines Again, But Still Difficult
In April 2024, hiring difficulties declined from October 2022 and weakened again, but remained strong. 52% of business leaders reported experiencing this difficulty, the lowest level in the series since July 2021, although still well above the long-term average.
Sales prices should remain largely stable over the next three months
Business leaders believe that their sales prices have risen by an average of 0.2% since January 2024. In the next three months, they expect that prices should remain almost stable: according to them, sales prices in the industrial sector should rise by an average of 0.1%.
The balance of the overall outlook for changes in industrial hourly wages has also retreated significantly and has fallen below the average level.
The cash flow of industrial enterprises is basically stable and slightly below the average level.
GraphicsIndustrialist’s view: employment, sales prices and cash flow
Balance of opinion, expressed as % SA
| manufacturing | Average* | July 23 | October 23 | January 24 | April 24 |
|---|---|---|---|---|---|
| Staff size | |||||
| Difficulty in recruiting (%) | Thirty-two | 60 | 57 | 53 | 52 |
| Overall salary expectations | -38 | -42 | -44 | -37 | -45 |
| Sales Price** and Cash Flow | |||||
| Past sales price change (%) | 0.2 | 0.3 | 0.2 | -0.4 | 0.2 |
| Estimated sales price change (%) | 0.2 | 0.0 | -0.2 | 0.0 | 0.1 |
| Cash flow issues*** | -7 | -11 | -8 | -7 | -8 |
- *: Long-term average since 1991, excluding cash flow issues (from 2021).
- **: For changes in sales prices, the Business Survey asks a quantitative question quarterly in addition to the qualitative question asked monthly.
- ***: Data are not seasonally adjusted as the series is only collected from 2021 onwards.
- The results of the latest survey are preliminary.
- Data source: INSEE-Quarterly Business Survey of Industry
Manufacturers slightly lowered their forecasts for annual investment changes through 2024
In manufacturing, more business leaders in April 2024 than in October 2023 expected investment to increase in 2023. This upward revision affected every sub-sector, but was more pronounced in transportation equipment manufacturing and in “other industries,” where the balance of opinion was highest.
Regarding investment changes in 2024, manufacturers made a second judgment on changes in investment expectations following the forecast in October 2023. The balance of opinion in the manufacturing industry, especially in the machinery and equipment manufacturing industry and the transportation equipment manufacturing industry, has decreased. In contrast, the balance of opinion in “other industries” has increased.
GraphicsAnnual investment trends
Balance of opinion, %
| Not applicable*: (A17) and (A38) | Weights** (%) | Between 2022 and 2023 | Between 2023 and 2024 | ||
|---|---|---|---|---|---|
| Estimated October 2023 | Estimated April 2024 | Forecast for October 2023 | April 2024 Forecast | ||
| CZ : Manufacturing | 100% | 20 | Thirty-two | twenty one | 19 |
| C1: Food and Beverage Manufacturers | 11% | 9 | 16 | 17 | 16 |
| C3: Machinery and equipment cargo | twenty four% | 20 | Twenty-seven | Twenty-seven | 16 |
| C4: Transportation Equipment Manufacturers | twenty two% | Thirty-four | 51 | thirty-seven | twenty four |
| C5: Other industries | 43% | 14 | thirty | 11 | 20 |
- *NA: Aggregate classification based on the French activity classification NAF rév.2.
- ** Weights used to aggregate sub-sector opinion balance
- How to interpret the table: In the April 2024 survey, the balance of opinion among industrialists on forecasts for changes in investment between 2023 and 2024 was +19.
- Data source: INSEE-Quarterly Business Survey of Industry
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