Business managers in France project manufacturing industry’s investment to fall 1 pct in 2019

The business managers in France surveyed in October 2018 project that investment in the manufacturing industry will decline by 1 percent next year in nominal terms. They expect a 4 percent rise next year in their investment spending compared to 2018.

Investment spending the transport equipment sector is likely to fall sharply this year. With an anticipated overall fall of 1 percent in investment for 2018, business managers have lowered their July 2018 estimate by 5 points. In the transport equipment sector, investment spending should decline considerably in 2018, whereas in July these businesses expected a rise in their investments in the year.

For next year, business leaders anticipate on average an upturn in their investment expenditures compared to 2018. Investment is expected to resume rising in the transport equipment sector, especially motor vehicle. It should also rebound in the agrifood industry.

For the first half of 2019, more business leaders plan a rise in their investment than a decrease. The balance related to investment change in the current semester is slightly down as compared to April but stays above its long-term average.

Investments are boosted by financing terms and demand outlook. For 2018 and 2019, the financing terms have been still considered conducive to investment. The balances of opinion regarding interest rates and financing conditions are markedly above their long-term average. The balances on the influence of domestic and foreign demand outlook have stayed at a high level, above their average.

Next year, the purposes of investment are expected to be similar to those of 2018. Particularly, the share of investment meant for the replacement of equipment should continue to be stable slightly above its long-term average. The share of investment meant for modernization and streaming should slightly decrease below its average. The share of investment meant to increase productive capacity should stay stable as its average level.

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