French non-financial corporates invested a record 21.4% share of their value added in 2018 and 53% of corporates are expected to do more in 2019, according to the Euler Hermes Investment Barometer (EHIB), particularly in the manufacturing sector. But, it entails four paradoxical facts. First, industrial sectors will behave defensively, particularly automotive where the EHIB shows that 56% of the corporates will adapt to new norms instead of adding capacity. Second, a third of French corporates will not invest in 2019 (a proportion that will double in size), burdened by excess capacity and low demand, particularly in consumer-related sectors. Third, the financial situation of French corporates deteriorated in 2018, with additional days sales outstanding (+2 days to 73 days of turnover) and an impact on cash positions that may prevent some of these corporates to invest (consumer-driven sectors and construction industry). Finally, despite no return on past digital investment for 71% of French corporates, 53% will increase their digital effort in order to catch up with competitors (88% in the agricultural sector).
