France: Deterioration in foreign trade - Natixis

France’s foreign trade (excluding energy) has deteriorated as a trend since the late 1990s, and significantly since 2013, points out Patrick Artus, Research Analyst at Natixis.

Key Quotes

“We seek to determine what part of France’s external deficit can be explained by:

• The cyclical situation (the capacity utilisation rate, companies’ hiring difficulties);
• Changes in cost competitiveness (the real trade-weighted exchange rate);
• Structural problems (shortfall in production capacity, insufficient sophistication of production).”

“The role of the sectors posting surpluses (luxury goods, aeronautics/space, pharmaceuticals) must also be taken into account.”

“Overall, the deterioration in French foreign trade can be attributed to:

• The cyclical situation (recruitment difficulties);
• Cost competitiveness;
• Weak industrial production capacity.”