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 EN FRANCAIS

KEY INDICATORS Q4 2005 : Industrial output index, stock levels, industrial confidence levels, local & international order books, the labor market, job offers, company banbkruptcies, consumer prices index-metropole-, car registrations, external trade 

The last quarter recorded major industrial output dips leaving the overall industrial production index to decline -0.4% and in a roller coaster pattern engaged from October when the strongest output gap occurrred -2.8% and, to a lesser extent in December to -0.3% flattening thus November +3.1% output upsurge.(That month all sectors recorded substantial output growth : the energy output index surged +6.9% as the automobile industry production index increased +7.1% along with capital goods +2.9% and intermediate goods +2.1% Out of that sector, the textile output grew +3.4% and the chemical-plastic and rubber item +2.3%) 

As a result, and on a quarterly basis, the AUTOMOBILE INDUSTRY output index fell an impressive -4.4% as fierce competition and a lethargic internal market forced major local car manufacturers to temporarily but repeatedly stop production lines so as to maintain stocks down since sales forecast had exceeded performance. Out of the automobile sector, the automobile equipment output index consequently dipped -4.6% The CONSUMER GOODS output index recorded a general slow down and grew a mild +0.3% with the leather and clothing output index declining -0.7% and the shoes-leather-travel goods production index dipping -3.1% The book printing and reprints output index climbed a slight +0.3% and the pharmaceutical-perfume-personal care products production index +0.9% The household equipment output index fell -0.8% but was salvaged by the sound-picture-video equipment output index substantial +7.9% gain. The ENERGY production index climbed a slight +0.3% impacted by the combustibles and fuels category output index falling -1.1% and the nuclear energy output index -1% drop , inadequate to sustain repeated peaks in demand during very cold winter temperatures. The water-gas-electricity output index only climbed +0.6% due in part to insufficient hydraulic energy output, a direct result of lasting water shortage. The electricity-gas-heat production index grew +0.7% The CONSTRUCTION output index remained stable.

The CAPITAL GOODS output index declined -0.3% as that sector managed to balance out some of its categories production gaps : the boats-trains-planes-motorbikes output index climbed +0.8% but inversely the rolling railway equipment output index fell an impressive -9.4% The space-shuttle and airplane equipment output index by contrast increased +2.1% due to Airbus’ order books. In addition, the transport and motorcycles equipment output index increased +4.2% as consumer demand and new models boosted production. Out of the mechanical equipment output index climbing overall +1.6% the mechanical equipment production index grew +2.5% but the smelting work products output index fell -0.7% and the farming machinery output index -4.2% The electric-electronic equipment category output index decreased a substantial -3.8% due in most part to the automobile sector in addition to the computer and IT equipment production index collapsing -18.1% The video-sound-transmission equipment output index dropped -8.9% and the measurement and control equipment production index -1.1% The orthopedic and medical surgery equipment output index reversed slightly that category’s negative trend and climbed +1.6% The INTERMEDIATE GOODS output index remained stable against the previous quarter although the textile output index collapsed -6% with the flax yarn production index dipping -3.7% and the textile products output index -4.2% The paper-wood-cardboard output index by contrast grew +1.2% and the woodwork production index gained a strong +4.3% but the wood pulp production and cardboard index only increased +0.5% The chemical-plastic-rubber production index fell -0.4% while the metal-metallic category output index remained unchanged although the steel transformation output index increased +5.2% The smelting products output index fell -3.6% despite strong boiler works order books as the automobile sector and construction had underperformed.

Source: Insee 

The electric-electronic components output index increased +2% with the electronic production index climbing +2.7% but the electric components production index grew a slight +0.5% given the automobile and automobile equipment output index declines. The mineral products category output index remained stable increasing a mild +0.1% but the glass and glass wear products output index fell -1.4% despite a strong perfumes market. The ceramics and construction material output index climbed +1.4% 

By comparison and on the same period according to Eurostat figures, neighboring EU countries recorded stronger output than in the Euro area averaging a quarterly output index of 104.4 compared with France’s 101.1  Ireland and the Czech Republic output indices grew respectively 131.5 or +11% and 148.7 or +7.5% Portugal’s output index increased +4% to 100.8 and Germany’s climbed +2.4% to 108

Source: Eurostat  

EU 25: Austria, Belgium, Finland, France, Germany, Greece, Spain, Ireland, Italy, Luxemburg, the Netherlands, Portugal, the Czech Republic, Cyprus, Denmark, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, Sweden the United Kingdom

Euro area: Austria, Belgium, Finland, France, Germany, Greece, Spain, Ireland, Italy, Luxemburg, the Netherlands, Portugal 

In one year, France’s overall industrial output index fell -0.4% impacted by the automobile industry massive -12.1% production gap index and to a lesser extent intermediate goods -0.9% The consumer goods output index prevented the overall index from dipping further and rose +2.6% along with the capital goods output index +2.5% gain construction’s +2.4% and energy +1.4%

Out of the automobile sector, the automobile equipment output index dived to -12.7% Intermediate goods’ textile saw output dip -8.4% with the flax yarn production index collapsing -12.4% and the textile products production index -7.4% All other categories recorded negative output indices with the exception of the electric-electronic components category output index +4% gain with the electric goods production index rising +5.8% The electric components production index stayed identical. The metal-metallic products output index fell -4.6% and recorded massive declines among which the smelting products output index -6.7% The steel transformation output index dived -6% and the metallic products index -5.6% The chemical-plastic-rubber category output index increased a mild +0.7% and the paper-wood-cardboard output index decreased -0.9% with the woodwork production index dropping -4.1% while inversely, the wood pulp output index grew +1.7% The mineral products category output index rose +0.4% due to miscellaneous extractive industry products output climbing +2.1% while the glass and glass wear products output index declined -3.2% The ceramics and construction material output index rose +2.3% 

Capital Goods boats-trains-planes-motorcycles output index climbed +6% but the rolling railway equipment output index dipped -13.2% inversely to the space-shuttle and airplanes equipment production index surging +9.1% The bicycles-motorbikes-transport equipment output index rose +10.2% The mechanical equipment categoryproduction index increased +5% smelting work products +1.3% mechanical equipment +3.8% but the farming machinery output index fell -5.7%

The consumer goods leather-clothing output index fell -3.4% due to the shoes-leather-travel goods production index collapsing -3.2% The book printing-reprints output index only rose +0.7% but the pharmaceutical-perfume-personal care production index grew +6.5% inversely to the household equipment output index decreasing -3.7%  

Out of the energy output index, the combustibles and fuels output index fell -1.1% and the refined petroleum products output index -0.8% The water-gas-electricity output index grew +1.8% similarly to the electricity-gas-heat production index. On the same period however, the hydraulic energy output index fell -10.2% due to reservoir water shortage while the nuclear energy output index only rose +0.6% The gas output index declined -15% the refined oil products production index dipped -9% while the coal output index fell -29.4% inversely to consumption’s +4.8% increase.

According to Eurostat figures, the European Union 25 industrial output index increased overall +2.5% on the same period and, the Euro area recorded a similar production index growth rate with the exception of Finland’s output index falling -1% Portugal’s industrial production index grew +5.6% Germany’s +3.9% Belgium’s +2.2% Spain’s +4.1% and Italy‘s +3.5% New European Union members production indices surpassed older EU members’ however : the Czech Republic's industrial output index jumped +8.4% Estonia’s +14.3% Hungary’s +12.9% Slovenia’s +10.6% Slovakia’s +9.4% and Latvia’s +9% Out of the Nordic countries, non Euro area members with the exception of Finland, Denmark's and Sweden’s output indices grew respectively +5.9% and +2.4% The UK ‘s industrial output index fell -1.5% Per sector, the construction output index jumped +24.8% in Estonia and +16.2% in Hungary. Malta’s index increased +16.1% Latvia’s and Lithuania’s each grew +14.2% but Germany’s construction production index fell -1.3% due to the large supply of housing available at low rates compared with other European capitals. 

France’s STOCK LEVELS remained fairly high in Q4 but as most industrial sectors succeeded in reducing their reserves, December heralded some upcoming relief. The automobile industry, impacted the most by a sluggish demand, managed to cut down stocks to 16 in December from a high 24 in October while similarly restraining output. Capital Goods stock levels fell to 14 in December from 18 in October slightly higher than the previous month 11 due to some particular items. Intermediate Goods managed to synchronize stock levels, reduced to 8 in December, and output to 7 due to early low output from October. Consumer goods stock levels by contrast remained mostly linear and even slightly increased to 8 in December from 6 in October due to a peak in output in anticipation on Christmas demand.

Source: Insee   

Nevertheless, the Industry ORDER BOOKS CONFIDENCE INDEX reflected a downward trend: the overall index collapsed -15 in Q4 from the previous quarter’s 5 as the foreign order books index dipped an impressive -9 from -3 and, in a consistent declining pattern from the beginning of the year.

As activities picking up +5.3% in the Euro area from November against the previous month and +3.8% in the EU 25 region. France’s actual manufacturing orders jumped +21.1% in Q4 according to Eurostat figures, allowing thus for stocks to rescind. With the exception of the automobile sector remaining pessimistic, the French Industrial Output Confidence index stayed prudent however for the next three months from December due for the most part to a volatile order books environment shifting from October and month on month: total manufacturing orders jumped +27.9% in Latvia +8.8% in Denmark +2.6% in Germany and +8.4% in Sweden.  Inversely in November, Sweden’s order books fell -6.4% Latvia’s still increased +19.5% Lithuania’s rose +8.2% and France’s order books jumped +27.9% By December, order books had switched to Malta and rose +16% while Latvia’s and Hungary’s order books dropped drastically respectively -29.5% and -31.1% Germany’s order books fell -2% The same month, France’s order books climbed +5.3% 

France’s automobile industry confidence index stayed in the red as some local automakers operating at around 40% capacity due to high stocks and lethargic demand did not expect to increase output between February and March although car registrations naturally increase then due to bonuses and pay increases. The capital goods confidence index stayed on a low positive trend although strong order books as regards planes, motorcycles, and rolling railway equipment assured high production and for an extended upcoming period of up to twenty five months.

The intermediate goods confidence index remained high as strong order books from the capital goods sector would very likely impact positively many categories output including electric-electronic components, metal goods, electric goods and plastic-rubber.

THE LABOR MARKET - METROPOLE - Q4 2005                                                                            

Overall unemployment fell -2% in Q4 to a total 2 641 000 million jobless or 9.3% compared with the Euro area’s 8.3% unemployment average. The under 25 age group benefited for the second consecutive quarter from a strong jobless rate decline -3.9% due to a series of governmental measures aiming to put youngsters to work. The 25 to 49 age bracket unemployment rate fell -2.3% and the 50+ age group similarly -2.4% 

Per gender, male unemployment overall fell -2.3% to 1 288 000 million jobless or 8.3% while the female jobless rate remained higher at 1 354 000 million jobless or 10.3% and declined -1.7% For the male population under 25, unemployment fell -1.5% to 309 000 jobless representing nevertheless 22% of the jobless population within that age group, the highest rate within the Euro area. The intermediate age group jobless rate decreased -2.6% to 758 000 unemployed. The 50+ age group jobless rate fell -2.5% to 221 000 The young female unemployment rate fell at a much slower pace than young male’s to -0.8% or a total 280 000 jobless while females aged 25 to 49 saw unemployment decline -2% unlike males to 860 000 Females over 50 also benefited from a jobless rate decline -2.3% to 214 000 unemployed.

In one year to December, and although overall unemployment declined -4.5% to 2 622 000 million jobless from the previous year 2 746 000 controversies emerged over government figures as the number of RMI recipients increased +5% and on the same period, a direct result of many unemployed being stricken out of jobless figures and no longer able to claim unemployment benefits. Nevertheless, and according to unemployment figures, all age categories recorded substantial jobless rate cuts: the under 25 age group unemployment rate dropped -4.1% to 586 000 jobless from 611 000 jobless a year earlier. The intermediate age bracket jobless rate declined -4.5% to 1 605 000 million jobless from 1 680 000 unemployed the previous year. The over 50 age group recorded the strongest unemployment rate decline -5.5% to 431 000 jobless from 456 000 Per gender, female unemployment fell -4.5% to 1 344 000 million from 1 408 000 million compared with male s’ declining -4.4% from 1 278 000 million from 1 337 000 million and, females over 50 saw unemployment drop the strongest -5.8% to 212 000 jobless from 225 000 unemployed a year earlier. The under 25 female jobless rate decreased -3.1% to 278 000 from 287 000 while the intermediate age bracket jobless rate derceased -4.8% to 854 000 from 897 000 compared with male s’ -4.1% to 751 000 from 783 000 and within the same age group. Males under 25 saw jobless figures fall -4.9% to 308 000 from 324 000 due for the most part to governmental measures to put the young back to work via contract tenures and tax incentives aimed at employers. For males between 25 and 49 unemployment declined -4.1% to 751 000 jobless from 783 000 while the over 50 jobless rate fell -5.2% to 219 000 unemployed from 231 000 

Job offers increased overall +6.1% in Q4 to 295 000 posts but remained dwarfed by unemployment figures expressed in millions as all job categories recorded strong to abysmal declines reflecting an atone economic environment: long term job offers (in gross figures) fell -2.4% to 120 000 offers from 123 000 impacted by both Q2 and Q3 poor market performance due to the uncertainties brought about by the June European Constitution Referendum results. In addition, summer vacations slowed down the recruiting process up to September when hiring regularly speeds up. Short term job offers (in gross figures) dived an impressive -16% to 95 000 temporary contracts from 113 100 reflecting industrial output gaps on the same period and poor consumer confidence leading to lesser temporary staff hiring. In addition, both job categories suffered from the November riots up to December as companies froze all hiring plans due to heavy property and financial damage. As a result, occasional job offers collapsed -47.8% to 25 280 offers from 48 394 leaving precarious job seekers with no perspective for immediate or even short term labor market improvement. In one year, job offers nevertheless improved and grew overall +12.5% to 298 000 offers from the previous year 265 000 for the most part due to governmental measures and various tax incentives aimed at employers : long term job offers grew the fastest +26.7% to 109 000 from 86 000 while short term offers jumped +10.5% to 84 000 temporary jobs from 76 000 the previous year. Occasional job offers, excluded from such measures, consequently declined -13.7% to 34 716 jobs from 40 245 jobs a year earlier.

COMPANY CREATIONS - FRANCE & DEPARTMENTS - Q4 2005                                          

Overall company creations increased +0.7% in Q4 to 27 077 businesses but new companies remained quasi stable climbing +0.2% to 19 207 from 19 178 on the same period. Buy backs increased the strongest +2.5% to 3477 from 3393 while reactivations rose +1.6% to 4393 from 4322 In volume however, new companies remained in the lead with a total 19 207 new entities for the most part dedicated to small and medium enterprises while reactivations represented a total 4393 company revivals. Buy backs recorded a substantial upward trend to a total 3477 despite major difficulties encountered by sellers, faced for the majority with retirement, due to both a lack of experienced professionals and available funding for potential entrepreneurs.

Only five sectors out of a total 11 recorded substantial company creations and concerned mostly B2C businesses with the exception of durable goods related sectors: both capital goods and intermediate goods new companies respectively surged +7.6% and +3.9%

The food and agriculture industry new companies increased a strong +6.4% similarly to real estate’s impressive +6.7% as a long lasting housing shortage increased demand despite both rentals and property prohibitive prices. Services to individuals’ surged +6.6% as this new market niche (which includes concierge services for corporations, private day care centers or hire-for-an-hour-or more services --ironing, landscaping, handy work, etc…--) was met with increasing demand due to tax incentives and paper work reductions. Nevertheless, and out of that sector, health-education and social services new businesses declined -0.8% while the café-restaurants-hotels category increased +3.4%

The commerce sector new companies only rose +0.4% following Q3 record numbers. By contrast, the consumer goods sector saw new businesses decline -3.2% impacted by both slow consumer demand and the previous quarter strong creations upsurge. New companies within the construction sector decreased -1.5% similarly slowing down from previous accrued activities while transports’ dipped a substantial -9.2% with December recording the strongest company creations decline -6.4% following the November riots with record damages to truck companies, rendering -5% crude oil prices decline a secondary issue. Services to companies new businesses fell -2.3% impacted by a slow down from a sustained previous quarter in addition to the November -5% dip despite December impressive +8.7% company creations upsurge.

In one year, overall company creations grew +9.1% to 27 904 from 25 575 with new companies taking the lead and climbing +11.1% to 19 741 from 17 769 Buy backs and reactivations increased at nearly similar pace respectively +4.6% to 3652 from 3490 and +4.5% to 4511 from 4315 Eight sectors out of a total 11 recorded strong company creations and B2C companies grew faster than B2B enterprises : real estate new companies jumped +24.7% to a total 1339 new entities from the previous year 1074 while services to individuals grew +6.4% to 5142 from 4834 with education-health-social services increasing +12% to 2093 from 1871 and for reasons similar to their most recent quarterly performance.

Services to companies new businesses also increased +24.7% to 5588 from 4481 The food and agriculture industry new companies rose +15.6% to 682 from 590 The commerce sector new companies by contrast remained flat with 7005 entities compared with 7008 the previous year. New companies within the construction sector increased +3.5% to 4378 from 4235 although staff shortage prevented that sector from expanding further. Intermediate goods new businesses grew +15.4% to 315 from 273 benefiting from a vibrant construction sector (tiles, ceramics, glass etc…) despite raw materials soaring prices. 

Capital goods saw new companies under perform by comparison and only climb +1.3% to 231 new companies from 228 as the last month of the year heralded many subcontractors’ bankruptcies triggered by outsourcing in lesser priced neighboring countries. 

Consumer goods new businesses dipped -5.6% to 572 from 606 as fierce competition, lack of consumer demand and the November riots discouraged potential entrepreneur into entering that sector. New businesses in the transport sector declined -2.4% to 558 from 572 as a direct result of oil prices soaring +62% in Euro/barrel to Euro 48 from Euro 29.7 while Rotterdam crude oil per barrel and in currency increased +43% to U$D56.9 from U$D39.8 Similalry to the commerce sector, potential entrepreneurs also postponed their company set up plans following the November events.

 COMPANY BANKRUPTCIES - FRANCE & DEPARTMENTS - Q4 2005                                              

Company bankruptcies jumped +31% in Q4 to 3833 from the previous quarter 2924 leaving very few sectors unaffected as a direct result of both an atone internal economic environment, and the dollar constant depreciation against the Euro. The construction sector recorded the highest company bankruptcy rate increase +47.3% to 955 company shut down from 648 and real estate recorded the lowest bankruptcy rate increase +14.1% to 108 from 95 The food and agriculture industry bankruptcy rate shot up +29.7% consumer goods’ rose +19% and commerce +28.5% with the car repair category bankruptcy rate jumping +36%

The transport sector bankruptcy rate surged +36% and services to companies +23.2% while services to individuals saw the bankruptcy rate increase +30% with the hotel-restaurants-café category rate jump +34% The capital goods and intermediate goods sectors bankruptcy rates increased respectively +18% and +22.3% In volume, the commerce sector kept record bankruptcy figures with a total 1038 company shut downs in Q4 The food and agriculture industry recorded the lowest company bankruptcy in volume to 80 company shutdowns and on the same period similarly with capital goods‘ 75. The construction sector recorded 955 company shut downs. Intermediate goods bankruptcies totaled 111, consumer goods 144 transport 170 and real estate 108 The services to companies sector accounted for 532 bankruptcies and services to individuals 615

In one year, overall company bankruptcies declined -4% and three sectors recorded substantial improvements: the food and agriculture industry and transport company shut downs declined each -13% and capital goods -20% Construction and commerce each saw company bankruptcies fall a slight -2%, real estate -8% services to companies -9% and services to individuals -4% Two sectors recorded company bankruptcy increases : the consumer goods group bankruptcy rate increased +4.6% and intermediate goods a lesser +0.8% 

CONSUMER PRICES INDEX- METROPOLE - Q4 2005                                                                      

The consumer prices index grew +0.3% overall in Q4 impacted by goods relying heavily on petroleum products and including manufactured goods +0.8% food products +0.3% and energy +0.4% The tobacco consumer prices index remained stable climbing +0.1% and services declined a slight -0.2% due to transport and communication while within the same category rent-water and garbage removal services increased a substantial +0.9%

Out of the food category, the fresh food products consumer price index climbed +2.1% to 114.10 from 111.7  The clothing and shoes price index out of the manufactured products category rose a substantial +4.6% to 103.9 from 99.3 due to transportation costs in correlation with such overwhelmingly imported goods. The rent price index increased +1% to 116.6 from 115.5 excluding sanitation services and water while the transport and communication services price index shed a non negligible -1.6% 101.5 from 103.2 reflecting electronic and telecom services recent consumer price cuts. The oil products price index stayed stable and climbed +0.2% despite crude oil trading prices falling -5% to Euro per barrel 47.9 from the previous quarter Euro/barrel 50.4 and in currency -7.4% to U$D/barrel 56.9 U$D/barrel 61.47

In one year, the overall consumer prices index increased +1.5% to 113 from 111.3 as the energy prices index had shot up +8.2% to 132.4 from 122.4 In addition, the services price index climbed +2.5% to 115.7 from 112.9 with the rent-water-garbage removal price index rising a substantial +3.5% to 117 from 113.1

The food price index increased +0.7% to 114.2 from 113.4 similarly to tobacco .The manufactured products price index recorded the only overall index cut -0.6% to 101 from 101.6 Out of the energy category, the oil products price index jumped +11.1% to 153.9 from 138.5 as Rotterdam domestic fuel trading prices soared +28% to U$D/t 514 from U$D/t 402 The fresh food products price index rose +2% 117.1 from 114.9 compared with other foods mild +0.9% increase to 113.7 from 113.2 The transport and communication price index climbed +0.7% to 101.7 from 101

According to Eurostat, inflation stood at 1.8% in December in France. Inflation in the European Union 25 member states stood at 2.1% that same month, slightly below November 2.2% Out of the Euro zone, the lowest inflation rate was recorded by Finland at 1.1% while the highest inflation rate in Spain stood at 3.7% 

Car registrations increased overall +14.1% in Q4 to 167 000 units from the previous quarter 146 300 and the foreign cars market share climbed +15.2% outgrowing French car registrations’ +12.7%  In volume however, new French car registrations remained in the lead with 89 000 cars sold compared with foreign cars totaling 77 500 units. Crude oil prices had a significant impact on potential buyers as gas engine car registrations increased +13% to 52 200 units compared with new diesel engine car registrations +14.6% increase to 114 400 cars and, representing more than twice new gas engine car sales. On the same period car output grew +17.1% to a total 432 800 cars and exports increased +15.8% to 325 300 units. French new cars recorded accrued unit sales in November +3.9% to 92 800 units against the previous month while second hand car sales grew +1.1% to 441 400 units on the same period. New and Foreign car sales jumped +12.5% to 79 200 units that same month and an additional +4.5% in December to 82 800 units. Diesel engine car sales increased +7.8% to 117 800 units in November but fell back -1.8% to 115 700 units the following month while gas engine car sales increased +8% to 53 700 units in November as crude oil prices had declined -3.9% Inversely, gas engine car sales fell -1.1% to 53 100 units in December as crude oil prices had increased +2.3%

In one year to December, overall car registrations fell -1.4% to 169 400 units from the previous year 171 800 impacted by a weak labor market just about to start recovering rather than soaring oil prices alone. Car buyers' cyclical purchasing patterns stayed unchanged : March and June recorded sales peak in direct relation with bonuses and pay rises usually granted during those months; sales fell sharply throughout the summer holiday season and stabilized from September once school related purchases and quarterly national tax revenue payments had been made. New foreign car registrations increased +6.4% to 82 800 cars sold compared with the previous year 77 800 units as perks (air conditioning, and other options) in addition to hybrid models (bio-fuel engines) pushed buyers away from local car makers. As a result, new French car registrations declined -7.9% to 86 600 units against the previous year 94 000 with new foreign cars closing in on their French competitors in volume and outperforming market share gain. New gas engine car registrations climbed +3.1% to 53 100 units against the previous year 51 500 cars although oil prices had soared +61.6% to Euro/barrel 48 from Euro/barrel 29.7 New diesel engine car purchases declined -3.5% to 115 700 units against the previous year 199 900 cars sold as an increasing number of car owners favored new bio fuel models. 

Car output declined -0.9% on the same period to 368 900 units from 372 300 a year earlier and output gaps accounted for several temporary assembly lines shut down as a direct result of poor sales underperforming forecasts and impacting particularly the last two quarters (July saw output dip -17.3% and August -54.1% in addition to staff vacations, October output fell -12.8% and -12.2% in December) Exports nevertheless picked up +4.1% to 302 700 cars from the previous 290 900 units salvaging thus an ailing sector, best of class among all industrial groups up to 2004 when fierce competition and soaring raw material prices had not yet drastically impacted its local market share.

Soaring oil prices caused the trade gap to widen in Q4 with imports increasing +4.3% to Euro 33948bn and outperforming exports climbing +1.4% to Euro 30400bn However, most sectors retained their recent market share gain with the exception of the automobile industry with exports remaining quasi stable, up +0.2% to Euro 4232bn. Best performers included the fisheries- agriculture group with exports rising +5.4% and the food and agriculture industry +4.5% Intermediate goods saw exports grow +4% unlike capital goods declining -1.6% following an extremely strong previous quarter due for the most part to Airbus massive orders.

Energy exports increased +3.1% compared with imports substantial +7.2% gain as unusually cold winter temperatures left nuclear energy supplies unable to cope with repeated peaks in internal demand. The fisheries-agriculture sector saw imports fall -1.8% as transport and packaging cost increases impacted sellers and buyers alike. The food and agriculture industry imports grew +2.1% restrained by slow consumer demand unlike consumer goods imports climbing + 3.2% and, despite an atone market. The automobile industry saw imports increase +2% in spite of high stock levels while capital goods increased a substantial +8% in preparation for further Airbus deliveries, impacting upwards intermediate goods +3.8%

Per region and on the same quarterly period, exports to the OECD grew the strongest +3.3% to Euro 24517bn with a volume index averaging 264.6 but falling -4.6% Out of that region, the export volume index to the US stood at 319.3 the highest among developed countries, but declined -8.5% reflecting foreign order books which had dipped -9 on the same period, despite the U$D-Euro parity +2.4% gain. By contrast, the export volume index to Japan increased +7.6% to 199.2 while the export volume to Switzerland fell -8.4% to 140.7 Exports to both the EU 25 and the Euro area grew each +1.5% and respectively to Euro 19642bn and to Euro 15257bn rebounding from the previous quarter. The export volume index to the European Union only increased +1.4% to 214.8 impacted downwards by the export volume index to Eastern Europe which had dipped -7.1% to 220.8 Out of the Euro zone, the export volume index to Italy rose +2.9% to 197.4 but the export volume to Germany although lower 172.6 grew +4.4% on the same period. The export volume index to Spain fell -1.8% to 292.6 The export volume index to Africa decreased -1.7% to 204.5

The trade gap with the EU area grew wider with imports exceeding exports by far and climbing +3.6% to Euro 20416.3bn The EU import volume index 231 increased +7.1% Imports from the Asean-Africa region increased the fastest +8.4%, mostly from Africa, to Euro 2519bn and the import volume index 161.3 increased +5% Imports from the Euro area rose +4.8% to Euro 16839.3bn and the import volume index from Germany 279, the highest among Euro members, increased +8.3% The import volume index from Spain 250.2 grew +1.9% while Italy’s at 167.6 climbed +2.3% The import volume index from Eastern Europe, a non Euro area, at 137.7 dipped -14.3% Imports from the OECD grew +3.9% to Euro 25642bn with a volume index at 238.1 declining -0.2% The import volume index from Japan at 280 the highest among developed countries, increased +5.6% followed by Switzerland’ 250.6 and jumping +12.8% The volume index from the US at 203.8 however declined -4.8% impacted by a currency gap rendering costs higher in dollar terms, including transportation expenses.

In one year, the trade deficit widened with imports increasing +13.9% to Euro 31639bn while exports grew +11.3% to Euro 34767bn In 2005 the trade deficit totaled Euro 24.2bn or nearly Euro 23K per taxpayer Out of exports, all sectors nevertheless regained substantial market shares. Energy grew the fastest +55% to Euro 1429bn from Euro 918bn as ENERGY prices benefited both from being pegged to oil prices and from strong demand climbing thus in volume index +49.9% to 535.1 from 356.9 a year earlier. CAPITAL GOODS ranked second with exports jumping +19% to Euro 7301bn from Euro 6135bn and an index volume increasing +8.8% to 251.7 from 231.4 The FOOD & AGRICULTURE INDUSTRY saw exports climb +10.2% to Euro 2740bn from Euro 2487bn with a volume index rising +4.2% to 129.2 from 124 The FISHERIES-AGRICULTURE sector exports rose +2.7% to Euro 900mn from Euro 876mn with a volume index increasing +5.2% to 160.1 from 152.2 The CONSUMER GOODS sector also recorded a substantial export growth +10.9% to Euro 4936bn from Euro 4452bn and in volume index surged +13.4% to 261 from 230 INTERMEDIATE GOODS exports increased +7.1% to Euro 9560bn from Euro 8926bn as raw material prices soared leaving the volume index to rise only +2.8% to 196 from 190.6 The AUTOMOBILE INDUSTRY exports declined -3.2% to Euro 4304bn from Euro 4446bn impacted by a strong Euro and fierce competition. Consequently, the export volume index fell -4.8% to 230.1 from 241.7

Source: Insee

Imports increased +11.2% to Euro 34767bn impacted by energy imports surging +40.9% to Euro 5567bn from Euro 3661bn as oil prices had soared +61.6% on the same period in spite of a strong index volume decline dipping -38.4% Capital goods imports increased an impressive +16.1% to Euro 7365bn from Euro 6341bn as the volume index jumped +20.8% to 395.3 from 327.2 a year earlier. Similarly, intermediate goods imports grew a substantial +9.1% to Euro 10351bn from Euro 9487bn impacted by raw materials soaring prices since the volume index had risen +5.3% to 217.7 from 206.7 On the same period, aluminum grade A settlement rose +18.7% to U$D/t 2194.8 from U$D/t 1848.7 while zinc worsened further inflationary trends jumping +54.3% to U$D/t 1826.7 from U$D/t 1184.1 Nickel -2.50% decline to U$D/t 13416.2 from U$D/t 13760.5 had no impact on such upward developments.

The automobile industry imports grew +3.6% to Euro 3742bn from Euro 3615bn impacted mostly by transportation cost and raw material prices as the volume index fell -5% to 203.1 from 213.7 due to high stock levels and a weak internal demand. Consumer goods imports rose +8.4% to Euro 5549bn from Euro 5117bn with a volume index increasing nearly similarly +7.4% to 266.3 from 247.9 as that sector recorded the only noticeable sustained internal demand despite an atone environment and a weak labor market (a higher volume was recorded in November +11% in anticipation of the Christmas season) The fisheries-agriculture sector’s imports grew +4.6% to Euro 746mn from Euro 713 with a volume index increasing +3.7% to 192 from 185.1 while the food and agriculture industry’s imports rose +5.6% to Euro 2104bn from Euro 1993bn with a volume index remaining nevertheless quasi stable +0.2% at 142.5 from 142.2 a year earlier.

In one year and per region , exports to the Asia-Africa area grew the fastest +23.5% to Euro 2484bn from Euro 2012bn and Africa recorded, for that region, the strongest market share penetration growth rate +23.2% to Euro 1898bn from Euro 1540bn Exports to the Asian region (Malaysia, Indonesia, Philippines, Singapour Tailand Brunei, Laos, Vietnam, Cambodia Birmany) grew similarly +24.2% but to a lesser extent in revenue to Euro 586mn from Euro 472mn. In volume index, and on the same period, exports to Africa rose +3.7% Exports to the OECD increased +12.8% to Euro 25829bn from Euro 22899bn but in volume index fell -2.9% unlike the US volume index increase +8.2% reflecting the dollar +12% gain against the Euro to 0.84 from 0.75 The export volume index to Japan jumped +17.2% while Switzerland’s grew a slight +0.4% Exports to the EU and the Euro zone rose respectively +7.2% and +8% to Euro 19877bn and Euro 15762bn In volume index, exports to the European Union grew +13.8% but fell -12.6% to Eastern Europe. Out of the Euro area, the export volume index to Germany climbed +0.7% rose +5.9% to Spain and +3.9% to Italy.

Imports from the Asian-Africa region accounted as well for the fastest growing commercial trading area and surged +47.8% to Euro 2930bn from Euro 1983bn Imports from Asia surged +54% to Euro 1093bn from Euro 699mn a year earlier followed closely by imports from Africa increasing +43.1% to Euro 1837bn from Euro 1284bn In volume index imports from Africa increased +3.7%

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