Informations Rapides · 25 July 2024 · n° 178

In July 2024, the foreign demand has weakened, according to the business leaders in the manufacturing industry Quarterly business survey (goods-producing industries) - July 2024

In July 2024, business leaders in the manufacturing industry have estimated that the demand over the last three months has been less dynamic than the previous quarter. They also have expected that demand over the next three months, particularly the foreign demand, to slow down. Besides, they have estimated that production bottlenecks have increased this quarter, reaching an unobserved level since April 2023. Finally, business leaders have anticipated a slow down of the wages in the industry.

In July 2024, the balances of opinion on the past change of the demand, both global and foreign, have sharply retreated. The balance related to the global demand has moved away from its long-period average and the one related to the foreign demand has gone back below its own. Concerning the expected change of the demand, both global and foreign, the balances of opinion have also retreated. Nevertheless, both remain above their average.

The share of companies at the limit of their production capacity has clearly increased in July 2024: 38% have deemed that they would not be able to increase their production with their current means if they received more orders, against 29% in the previous quarter. This proportion has moved quite largely from its average, reaching its highest level since April 2023. At the same time, slightly fewer business leaders than three months ago have considered their production capacities sufficient given the expected change in orders over the coming months. The associated balance of opinion has retreated and has moved away from its average. The production capacity utilisation rate has slightly increased: at 81%, it nevertheless remains below its average level.

The balance of opinion on the expected change in investments over the next three months has sharply decreased and has gone back to its January level, well below its average (calculated since October 2021, when this question has been introduced in the survey).

From April to July 2024, the proportion of business leaders declaring encountering hiring difficulties has fallen from 52% to 48%. This share, which has been falling since October 2022, remains well above its long-term average but has reached its lowest level since July 2021.

In July 2024, business leaders have reported, on average, that their selling prices have decreased by 0.1% over the last three months, a stable evolution since their reports in January 2024. For the next three months, business leaders anticipate an increase in their selling prices (0.2%).

The balance on the general prospects of change in hourly wages in the manufacturing industry has clearly decreased again and has continued to diverge from its long-term average, reaching its lowest point since July 2021.

The cash-flow situation of industrial enterprises has been deemed more deteriorated than in April: the associated balance of opinion has diminished again and has moved away from its average (calculated since October 2021, when this question has been introduced in the survey).