Informations Rapides · 4 February 2021 · n° 034

Business managers have forecast a strong recovery in their investment in 2021 in most industrial sectors Industrial investment survey - January 2021

The business managers in industry surveyed in January 2021 have estimated their investment to have fallen by 13% in nominal terms in 2020 compared to 2019. Thus, they have increased their previous estimate by 1 point, instead of lowering it by 1 point as in average at this time of the year. For the year 2021, they have forecast a strong rebound in their investment expenditures, with a 10% rise in nominal terms. The recovery in investment should be very sharp in the electrical, electronic and machine equipment sector; however it should be tenuous in the transport equipment sector.

With an overall decrease of 13% in investment estimated for 2020, business managers in industry have increased by 1 point their October 2020 estimate, whereas they had lowered it by 1 point in average at this time of the year from 2004 to 2020.

All sectors put together, industrialists are expecting a strong recovery in investment in 2021, with a 10% growth in nominal terms. Thus, they have raised their October forecast by 6 points, that is to say 2 points more than the average update at this time of the year.

In 2021, investment should recover markedly in the agri-food industry (a +9% growth expected in 2021 after −6% in 2020) and in the “other manufacturing” sector – textile, chemicals, pharma, metal work, and so on – (+9% expected in 2021 after −12% in 2020). In the electrical, electronic and machine equipment sector, companies are being very optimistic: they have updated their October estimate by 16 points upwards and have forecast a 25% growth in investment, after −9% in 2020. However, the investment of the transport equipment sector should only recover slightly in 2021 (+3% after −23%).

The business managers will revise again their expectations for 2021 over the next quarters: on average since 2003, the forecast issued by companies in January has been 3 points higher than the value ultimately declared in July the year after.

For the second half of 2020, as many business managers in industry have reported a rise as a fall in their investment as compared to the first half of 2020. The balance of opinion related to the actual change in investment in the ongoing half year has rallied at 0 after –17 in the July survey. It is the second strongest rise in this balance, after the 29 points hike recorded between the second half of 2009 and the first half of 2010.

Many more business managers have anticipated a rise rather than a fall in their investment for the first half of 2021. The balance of opinion related to the expected investment in the ongoing half year has recovered to +14 after +3 in July, and has exceeded its long-term average (+4). This balance has reached its highest level since 2011.