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 EN FRANCAIS

KEY INDICATORS Q2 2008 : industrial output index france, industrial output euro area and eu 27, gdp france euro area & eu 27, 

industrial order books index, producer prices index france,euro area & eu 27, consumer prices index france and dom-tom,inflation, household consumption of 

manufactured products, external trade,turnover indices, imported raw materials prices index, farm products prices index,company formations

INDUSTRIAL OUTPUT INDEX - Q2 2008                          

Overall INDUSTRIAL PRODUCTION dipped -1.4% compared with the previous quarter impacted by May and June output gaps affecting France as well as major Euro area economies. In April and month on month, production in France had surged +1.7% (excluding energy and the food and agriculture industry) with the AUTOMOBILE INDUSTRY performing best out of all sectors +3.8% and pushing up thus CAPITAL GOODS +2% along with INTERMEDIATE GOODS +1.6% CONSUMER GOODS output rose +0.5% and the FOOD and AGRICULTURE INDUSTRY unchanged or +0.1% Out of Capital Goods, the electric and electronic components production surged +2.7% and similarly, Intermediate Goods electric and electronic equipment +2%. Chemical products-plastic and rubber products also rebounded +3.1% Consumer Goods best performer included leather-clothing output +2.4% and household equipment +1.5%. May recorded a -2.6% output dip as the Automobile Industry production collapsed -8% followed by Intermediate Goods -2.4% and Consumer Goods -1.3% The Food and Agriculture Industry output fell -0.9% Intermediate Goods heavy weights underperformed : electric-electronic equipment output slid -1.3% metal and metallic products -1.5% in addition to all its other components: chemical products-plastic-rubber production -3.6% mineral products -3.4% textile -2.8% and paper-cardboard products -2.3% Out of Capital Goods, the planes-trains-boats-motorcycles production climbed a modest +0.3% while mechanical equipments and electric-electrical components rescinded respectively -1.6% and -1.3% impacted by the auto industry. The consumer goods sector did not fare better with leather-clothing output falling -2.5% similarly to printing-reprints and household equipment -2.2% 

Source: Insee

In the Euro area, output observed a similar downward trend -1.9% due to Durable Consumer Goods production declining -3.3% , Intermediate Goods -1.4% , Non Durable Consumer Goods -1.2% Capital Goods production fell -2.4% and Energy -2.7% That same month, Germany’s output slid -2.6% and the Netherlands along with Portugal recorded the strongest production fall respectively -6% and -5.7% June saw overall industrial production on a sustained declining trend -0.4% pushed down anew by the Automobile Industry -2.9% The Food and Agriculture Industry production performed similarly to the previous month -0.9%, Consumer Goods recovered and rose +0.5% Capital Goods declined -1% and Intermediate Goods -0.4% Capital Goods best of class trains-planes-boats-motorcycles and mechanical equipment recorded flat outputs, dragging Intermediate Goods electric and electronic components to similar levels. The metals-metallic products output nevertheless rose +1% unlike chemical-plastic-rubber products declining -2.4% Consumer Goods only component to record positive production involved perfumes-pharmaceuticals-personal care products +1.4% while leather-clothing observed the hardest fall -2.4% and for the second consecutive month. Household equipment output fell -0.6% In the Euro area, output remained stable although Intermediate Goods production fell a slight -0.2% Capital Goods -0.4% and Durable Consumer Goods -0.1% Non Durable Consumer Goods production rose +0.9% and Energy +1% The most significant production gains were recorded by the Netherlands +2.9% Greece +2.4% and Portugal +3% while Ireland’s fell -5.3% and Finland’s -2.3% In one year, overall output (excluding Energy and Construction) fell -1.3% impacted by all sectors with the exception of Capital Goods +2.3% production increase. The Automobile Industry output dipped -4.6% the Food and Agriculture Industry -2.2% Intermediate Goods -2.5% and Consumer Goods a substantial -4.1%. Energy output however rose +2.1% and Construction +2% Consumer Goods recorded worst performance with all components production declining substantially leather-clothing -12.1% household equipment -9% and to a lesser extent pharmaceuticals-perfumes-personal care products -0.6% Out of Capital Goods, the boats-trains-planes-motorcycles stayed sustained and rose +9.3% along with mechanical equipment +2.4% while electric and electronic components production fell -3.1% pushed down partly by the auto industry.Intermediate Goods most drastic production decline was recorded by textile diving -12.7% and chemicals-plastic-rubber products -4.4% due to oil prices. Paper-wood-cardboard products did not fare better and saw production dip -4.6% while electric components output climbed a modest +0.3% and metals-metallic products +0.8% In the Euro area, output fell -0.5% Intermediate Goods declined -1.1% Energy -0.8% and Durable Consumer Goods dipped -5.3% while Non Durable Consumer Goods a less drastic -0.6% Capital Goods rose +1.6% On the same period Spain recorded the hardest output gap -9% Germany’s industrial production rose +1.7% Ireland’s +6.1% the Netherlands +1.8% while Finland’s fell -3.3% Out of the EU 27, the UK’s output fell -1.8% Lithuania’s -5.2% and Estonia’s -4.7% while the strongest output involved Poland’s +7.3% and Slovakia’s +6.3%

GROSS DOMESTIC PRODUCT- Q2 2008 

GDP in France dipped -0.3% against the previous quarter in a domino effect involving a decline in household consumption -0.1% as well as capital investments -1.5% and exports -1.7% In the Euro area GDP fell -0.2% and -0.1%

Source: Insee

 in the EU 27 according to a Eurostat first estimate (in Q1 +0.7% in each region). Germany’s declined -0.5% and Italy’s -0.3% Compared with the first quarter of 2007, seasonally adjusted GDP rose +1.5% in the Euro area and +1.7% in the EU 27. In the US, GDP increased + 0.5% in Q2/08 (+0.2% in Q1/08) In Japan GDP increased respectively +0.6% (after +0.8%). Compared with the same quarter of the previous year, GDP rose + 1.8% in the US (+2.5% in the previous quarter) and + 1% in Japan (+1.2% in the previous quarter) In 2007, FRANCE's GDP increased on average +2.2% in 2007 similarly to 2006. In 2005 GDP rose +1.9%  In 2007, altough internal demand remained sustained +2.3%, exports slowed down +3.1% compared with +5.4% the previous year while imports stayed strong +5.5% (+6.5% in 2006). FRANCE’s GDP in Q3 is forecasted by Banque de France to grow 0.1% 

INDUSTRIAL ORDER BOOKS INDEX - Q2 2008 

France’s ORDER BOOKS dipped -3% against the previous quarter and -1.6% in the Euro area compared with -0.9% in the EU 27 offset by May and June negative performances. The quarter started on a positive trend, with order books in France climbing month on month +5.9% compared with +3.6% in the Euro area and +3.8% in the EU 27. Germany’s order books had however fallen -0.6% and Spain’s -2% In May, France’s order books slid -4.6% Germany’s a less drastic -1% and Italy’s -6.4% leaving overall all orders to plunge -3.5% in the Euro area and -4.7% in the EU 27. In the Euro area, the strongest order books decline was recorded by transport equipment -7% followed by textile and textile products -4.2% machinery and equipment -4% and electrical-electronic equipment -3% In the EU 27 orders of transport equipment dipped -8.5% and machinery and equipment -7.7% Out of the EU 27 Denmark’s order books jumped +14.8% By June, ORDER BOOKS remained on a downward trend and fell -0.3% in the Euro area but remained quasi stable in the EU 27 or -0.1% In the Euro area, the strongest order books decline was recorded by transport equipment, for the second consecutive month, -3.7% followed by machinery and equipment -1% while orders of textile and textile products picked up +2.2% similarly to electric electronic equipment +1.4% and chemicals-chemical products +1% Orders of basic metals and fabricated metal products rose +0.8%

Source: Eurostat

PRODUCER PRICES INDEX - Q2 2008 

PRODUCER PRICES in France jumped +2.5% compared with the previous quarter and climbed +2.8% in the Euro area and a steep +3% in the EU 27 impacted upwards by raw materials inflationary prices, mostly Energy and Intermediate Goods, the first two months of the quarter: in April France’s PRODUCER PRICES increased +0.7% compared with the previous month slightly below the Euro area’s +0.8% where Energy prices gained +2% along with Intermediate Goods +0.7% while Capital Goods prices rose +0.2% May recorded the steepest producer price increases +1.3%, slightly above the Euro area’s +1.2% as Energy prices jumped +4.1% in the same region compared with +3.3% in the EU 27. Intermediate Goods producer prices rose +0.5% rescinding from the previous month inflationary +0.7% Capital Goods prices stayed quasi stable or +0.2% while each Durable Consumer Goods and Non Durable prices remained unchanged. In the EU 27, Non Durable Consumer Goods gained +0.3% France’s producer prices remained among the lowest in the Euro area for the third consecutive month and ranked fifth behind Ireland’s +0.5% Belgium, Germany and Finland +1% each. Out of the EU 27,the steepest producer prices increase involved Denmark’s +3% for the second consecutive month and the UK +1.7% 

Source: Eurostat

In June, prices rescinded due to a general economic slow down leading to lesser demand for raw materials prices: PRODUCER PRICES increased +0.7% and the EU 27’s rose +1.2% compared with the Euro area’s +0.9% In the latter region, producer prices in Germany grew overall +0.9% a steeper +1.1% in Finland but soared +2.2% in the Netherlands. Energy producer prices increased the most out of the Euro area +2.7%, although modestly compared with May, Intermediate Goods rose +0.5% while Capital Goods stayed quasi stable or +0.2% nearly similarly to Non Durable Consumer Goods +0.3% Producer prices of Durable Consumer Goods remained unchanged. In the EU 27, prices nearly mirrored the Euro area’s with the exception of Energy +3.3% and Intermediate Goods +0.7% The UK recorded one of the most inflationary price increases +2% In one year to June, France’s producer prices gained a steep +7.3% and the Euro area’s +8% where Energy prices jumped +21.4% along with Non Durable Consumer Goods +4.8% Capital Goods prices grew +2% and Durable Consumer Goods +2.3% The Netherlands recorded some of the strongest producer price increases +13%, Germany’s rose +6.7% and Finland’s +6.9% In the EU 27 prices increased +10.1% overall with Energy prices skyrocketing +27% Producer prices in the UK jumped +19.5%

CONSUMER PRICES INDEX FRANCE & DEPARTMENTS - Q2 2008 

The CONSUMER PRICES index rose a steep +1.4% against the previous quarter impacted by food and energy recording inflationary increases respectively +1.7% due to fresh produce +7.4% gain and +6.7% as oil products price index jumped +9.9% On the same period, other increases involved transport and communication +1.4%. Manufactured products observed strong price increases as well +0.9% as clothing and shoes prices rose +5.4% unlike health products -0.5% price index cut. The services price index rose +0.7% with rent remaining quasi stable. In Metropole, excluding DOM TOM, other manufactured products stayed quasi unchanged or -0.1% and services including rent and water +0.7% Consumer prices recorded one of the steepest increases that quarter: Euro area food prices jumped +7.1% in April in one year compared with 3.3% overall inflation according to Eurostat. Milk, cheese and eggs recorded the highest increases +14.9% on the same yearly period along with oil and fats +13.2% fruit, bread and cereals each +10.7% Fish and seafood prices soared +7.2% in June 2008, and increased the fastest since 1996 +46.5% Vegetables prices reached a record high in January 2002 +17.5% and jumped +34.4% on the same period.

Source: Insee

In one year to June, the overall index rose +3.5% due to food +5.5% tobacco +6.2% and energy +18.8% Out of the food index the fresh produce component prices index increased +3.7% but excluding fresh produce that component still gained +5.9% Manufactured product stayed quasi unchanged or +0.2% as health products prices index fell -1.9% while clothing and shoes grew +0.8% and other manufactured products +0.6% Out of energy, the oil products price index soared +28%

INFLATION at the end of the quarter in France remained unchanged 2%, pushed up by oil and food products, but including DOM TOM jumped to 4% similarly to the Euro area’s. Germany remained the only member states able to maintain inflation subdued by comparison at 3.4% The highest inflation rates that same month in the Euro area were recorded by Slovenia 6.9% Belgium 5.9% Luxembourg 5.8% Malta 5.6% Cyprus 5.3% Spain 5.1% and Greece’s 4.9% Finland’s reached 4.3% In the EU 27, Latvia’s inflation rate of 16.5% Bulgaria’s 14.4% Lithuania’s 12.4%and Estonia’s 11.2% accounted for the highest rates.

HOUSEHOLD CONSUMPTION OF MANUFACTURED PRODUCTS - Q2 2008 

HOUSEHOLD CONSUMPTION of manufactured products declined -2.3% against the previous quarter and melted to Euro 20957 bn compared with Euro 21 449 bn as sales of textile-leather collapsed -26.9% on the same period. Sales of durable goods- cars and household equipment- performed modestly gaining respectively +1.9% and +1.3% while sales of the commerce sector fell -0.6% and other manufactured products -0.4%

Source: Insee

Month on month along the quarter, sales of durable and non durable goods performed unevenly: in April, household consumption of manufactured products fell -0.8% impacted by a drop in car sales and for the second consecutive month -2.7% similarly to clothing-leather -3% while sales of household equipment increased +1.6% Sales of other manufactured products stayed quasi unchanged or -0.1% In May, sales of manufactured products rebounded +2% impacted by sales of Durable goods +2.8% with car sales surging +5.6%.Sales of textile-leather products rebounded +4.3% while sales of household equipment slowed down to +0.6%.Sales of other manufactured products rose +0.4% The quarter ended in a new downward trend as manufactured products fell -0.4% : sales of Durable Consumer Goods declined -1.3% with car sales dipping -3.8% while sales of household equipment rose a modest +0.8% . Sales of textile-leather products grew +0.6% and other manufactured products remained the same or -0.1% In one year to June, overall household consumption climbed +1% impacted by June pause. Car sales remained strong however +6.6% pushing up Durable Consumer Goods +4.4% along with sales of household equipment +2.9%. Sales of textile leather fell -0.6% similarly to sales of other manufactured products.

EXTERNAL TRADE - Q2 2008

The TRADE GAP widened in June to € -5.640bn and to a cumulative € -48 338bn year on year according the Department of Statistical and Economic studies as exports fell -2.7% in three months compared with the previous quarter but grew +3.4% year on year. The quarter was impacted downwards by declining exports except in April, +1.4% month on month to € 34 966bn while imports fell -0.2% to € 38 682bn Out of exports, and in one year from last May to April, top 10 products included spaceship and aircrafts, pharmaceuticals, organic chemicals, steel and steel transformation products, automobile equipment, electrical equipment, drinks and refined oil products. Best industrial sectors overwhelmingly included Capital Goods, Intermediate Goods, and the Food and Agriculture Industry. In May, exports fell -3.1% in three months and sales of industrial goods declined €-800 mn, offset however by substantial exports of refined oil products and the food and agriculture industry products. Exports out of the Consumer Goods sector, regained in April, remained strong while intermediate goods and the automobile industry observed a drop in sales. Exports to the EU27 stayed tamed, with the exception of Germany and non EU member states as well as Africa. By contrast, exports to the US and the Middle East fell. 

Source: Eurostat- (Euro area and EU 27 first estimates)

Imports rose faster in value due to refined oil products and agro industrial products (vegetable oil). In June, sales of pharmaceutical products, chemicals, steel products, and the food and agriculture industry remained sustained while exports of refined petroleum products declined. Exports to the EU rose with the exception of Spain and, exports to the US as well as the Middle East fell for the second consecutive month. Imports increased slightly in June +0.7% but jumped +8% in one year due to refined oil products impacting the fuel bill to nearly € 1bn The Euro area trade balance first estimate with the rest of the world in JUNE recorded €0.1 billion deficit (€ +7.5 bn last year) according to Eurostat. In April, the Euro area recorded €+2.3bn surplus (€+2bn last year) In April 2008 compared with the previous month, seasonally adjusted exports rose + 6.2% and imports + 3.6%. In May, balance was €-3.9 bn, compared with €+1.2 bn a year ago and in June 2008 compared with May 2008, seasonally adjusted exports rose +1.4% and imports +2.9%. The first estimate for the June 2008 extra-EU trade balance was a deficit of €20.1 bn, compared with €-9.1 bn in June 2007. In May 2008, the balance was €-21.3 bn, compared with €-15.0 bn in May 2007. In June 2008 compared with May 2008, seasonally adjusted exports rose + 0.5% and imports +2.7%.

TURNOVER INDICES -Q2 2008

Source: Insee

IMPORTED RAW MATERIALS PRICES INDEX - Q2 2008  link to month on month reports

IMPORTED RAW MATERIALS PRICES INDEX rescinded and recorded modest increases compared with previous periods as a general economic slow down triggered lesser demand worldwide impacting downwards trading prices overall. In Q2 compared with the previous quarter and expressed in Euro, commodities prices index rose +2.3% and in currency +6.4% due to a weak dollar (USD) On the same period however, oil prices per barrel remained the exception, and jumped +20.7% to Euro 78 quarterly average compared with USD 121.8 or +25.7% Heating oil recorded similar inflationary trends +24% in Euro and +29.1% in currency soaring respectively to Euro 735 and in USD 1148.3 The food component arched over the overall index increase and jumped +7.3% in Euro (+11.8% in currency) pushed by cereals +58.5% gain and in currency +64.7% Yet that component was offset by sugar prices falling -14.5% in euro and -10.8% in currency.

Source: Insee

In Euro, Brent crude oil prices jumped +61.6% and heating oil +70.7% while in currency prices soared respectively +86.8% and +97.9% Food products prices expressed in Euro increased +41.4% with cereals gaining +109.1% (109% the previous month year on year) oil seeds +44.8% tropical food products +22.9% and sugar prices +5.3% Industrial products prices dipped -9.3% impacted downwards by coniferous sawn timbers prices collapsing -34.2% leather prices -19.5% while natural rubber prices rose +24.3% and natural textile fibers +4.8% Mineral prices also dipped significantly -9.8% due to non ferrous metals prices diving -17% although precious metal prices gained +19.2% and steel prices +43.1% In currency, food products prices jumped +65.2% impacted by cereals +142.3% oil seeds +69.3% tropical food +42.6% and sugar +21.9% Industrial products prices gained +5% pushed up by natural textile fibers prices +21.6% natural rubber +36.2% unlike leather prices -6.6% and coniferous sawn timbers -23.8% Minerals prices rose +4.9% due to steel prices +66% and precious metals +43.5%

FARM PRODUCTS PRICES INDEX - Q2 2008 

Overall FARM PRODUCTS PRICES fell -5% compared with the previous quarter as each cereals and animal products recorded substantial prices decline respectively -7.3% and -4.3% Out of the vegetable component and on the same period, the cereals price index dived -17.7% and soft wheat -80.7% along with barley -17.2% and maize -6% Oil seeds prices dipped slightly by comparison -1.1% Out of animal products, veal prices fell the hardest, -14.4% unlike pork +2% and chicken +2.1% The eggs price index fell -10.9% The last month of the quarter recorded both significant price increases and the hardest declines: the fruit price index jumped +17% , maize +3.2% oil seeds +2.3% pork +5.5% sheep +3.3% rabbit +2.3% and eggs +5% while the potatoes price index dived -16% vegetables -5.6% barley -1.1% and soft wheat -1.6% 

Source: Insee

On the same period, the wholesale prices index (expressed in gross figures) grew overall +3.1% impacted by the fruit component +11.3% prohibitive increase and eggs +9.9% beef +3% pork +3.7% the strongest price cuts involved lettuce -23.7% veal -7.7% and sheep -5.8% In one year and in seasonally adjusted figures, the overall index grew a modest +0.3% offset by each the vegetables price index and animal products falling -0.2% as vegetables and fruit prices rose +3.7% The most substantial price index increases were recorded by maize +3.2% and oil seeds +2.3% fruit +17% pork and eggs +5.5% each. The strongest price index cuts were observed by potatoes -16%

COMPANY FORMATIONS - Q2 2008 

COMPANY FORMATIONS fell -12.2% compared with the previous quarter impacted by May general drop in company creations but in one year, the number of new businesses rose +11.4% (in gross figures)

Source: Insee

In April and month on month, creations rebounded +3.5% due to sectors overall surge: new companies out of the Real Estate sector grew +15.9% followed by the Food and Agriculture Industry +14.7% and Services to Individuals +5.2% Construction new businesses rose +4.1% along with Capital Goods +3.8% and Services to Companies +3.9% Education-Health-Social Services formations increased +3.2% Intermediate Goods new businesses remained on a downwards trend -7.2% similarly to Transport modest +0.8% increase. The Commerce sector formations stayed stable or +0.1%

In May, the strongest company formations decline involved the fFood and Agriculture Industry -6% followed by Consumer Goods -3.5% and all sectors averaged similar falls. In June however, new companies rebounded +3.1% impacted by several sectors formations surge: Capital Goods saw new businesses increase +17.3% Real Estate formations rose +7.8% Services to Companies +5.7% and Education-Health-Social Services +7.6% By contrast, new companies out of the Services to Individuals group fell -4.6% the Food and Agriculture Industry’s rescinded -13.1% Transport -4.8% Consumer Goods -3.8% and Intermediate Goods -2.8% 

In one year and in gross figures, the Commerce sector ranked first with a total 80 688 formations, followed by Services to Companies 72 228, Services to Individuals 45 804 new businesses and Real Estate with 20 137 creations.

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