Tuesday, February 7, 2017

The alarming widening of the trade deficit in the French – Echoes

” The year 2016 has not been good for the trade, this is not worth beating around the bush. “Matthias Fekl, secretary of State for foreign Trade, summary, this Tuesday, the situation. For the first time in four years, the trade deficit of goods has increased. It reached a 48.1 billion euros in 2016, or 2.5 billion euros more than in the previous year. By way of comparison, over the first eleven months of the past year, Germany has a trade surplus of 234 billion euros.

But the number of French cache, in fact, a worsening and more disturbing. Because the energy bill was down by more than € 8 billion in 2016 with the decrease in the price of oil. The balance of manufactured goods, that is to say, excluding agriculture, energy and military equipment, has widened to more than 10 billion euros in the past year. It amounted to 35 billion euros, exceeding its 2011 record. It is therefore far from the ” zero deficit, excluding energy, set by François Hollande upon her arrival at the Elysee, and abandoned two years later. This figure alone says a lot about the weakness of the productive fabric French in general and industry in particular. It shows that there has been no improvement of the competitiveness of france since 2012.

performance automotive

More in detail, the worsening of the overall deficit can be explained by the counter-performance of the three sectors traditionally very dynamic : the aerospace, automotive and agriculture, which ” contribute most strongly to the degradation of the external trade “, according to Matthias Fekl. The balance of the car has deteriorated from $ 2.5 billion in a year and the problem is serious, because structural. The increase in vehicle imports, in particular from Germany, grew strongly while the surplus recorded by the equipment manufacturers, to him, is reduced. The latter tend to follow their customers, the manufacturers, and therefore to relocate. “It is an element of worry,” confessed the secretary of State.

The difficulties experienced in the aviation sector in the past year, and in the first place Airbus, appear, on the other hand, cyclical. The aircraft manufacturer has suffered from delays in delivery in 2016 due to supply problem which slowed down the production chain toulousaines. As of this year, the trade surplus generated by traditionally this sector is expected to increase. It is the same for the agriculture. Due to unpredictable weather in 2016, the harvests have been bad.

Another reason for the increase in the overall trade deficit, which could prove to be only temporary : imports of mechanical equipment, electronic and computer have been strong. This can be explained at least in part by the dynamism of business investment, from the previous year by the extent of over-depreciation of productive investments.

In a recent study, the economist Coe-Rexecode, noted that, since 2012, hourly labour costs in the manufacturing industry in France rose by 4.8 %, ” a rate much more moderate than in the euro area average (7.3 %) and Germany (+9,3 %) “. The government’s measures have helped to moderate the cost of the work, but they have not in themselves been sufficient to straighten the bar. The next executive is notified.


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