In May 2023, the business climate in the manufacturing industry has once again deteriorated, falling just below its long-term average. According to the latest monthly business survey conducted among industry managers, the synthetic indicator measuring the business climate has lost two points, reaching a value of 99. This marks the third consecutive month of decline and the first time since March 2021 that it has dipped below the long-term average of 100. The decline in the balances of opinion regarding past production and overall order-books has notably contributed to this negative trend.
The balance of opinion regarding the change in production over the last three months has significantly worsened, dropping below the average level. Both general and personal production prospects have diminished for three consecutive months, reaching their lowest point since November 2020.
The balances of opinion related to the level of order-books, both overall and foreign, have also decreased. The balance associated with overall order-books has fallen notably below its average.
Although the balance of opinion related to the current level of finished-goods inventory has decreased, it remains above the average.
The balances of opinion concerning past and expected changes in workforce size have remained relatively stable, well above their respective averages.
The balance of opinion regarding the expected trend in selling prices over the next three months has also declined, reaching just below its long-term average. This decline has been ongoing since the beginning of the year.
The percentage of companies reporting sourcing difficulties as a factor limiting their production has continued to decrease, reaching 21% compared to the previous month’s 25%. Similarly, the percentage of companies facing workforce shortages as a production limitation has decreased to 17%. However, both percentages remain above their respective averages.
In terms of specific sectors, the business climate has clearly deteriorated in the manufacture of machinery and equipment goods, reaching its lowest level since January 2021. However, it remains above the average. The balance of opinion regarding overall order-books has experienced a significant drop.
The business climate in the manufacture of food products and beverages has remained stable in May 2023, albeit significantly below its long-term average, following a sharp decline in the previous month. However, the three-month production prospects have slightly recovered.
The business climate in the manufacture of transport equipment has remained broadly stable. While it has deteriorated in the manufacture of motor vehicles, trailers, and semi-trailers, falling below the average, it has improved in the other transport equipment sector, reaching its highest level since August 2022.
Lastly, the business climate has significantly deteriorated in the “other industries” sector. The synthetic indicator has moved further away from its average and has experienced declines across all sub-sectors.
These findings highlight the challenging business environment faced by the manufacturing industry in France, with persistent declines in production indicators and growing concerns among business managers.