Labor Market, Industrial Output Index, producer prices index, GDP, Household Consumption of Manufactured Products, Order Books index, Consumer Prices index, Inflation Euro area, Construction Output index, Retail sales, External Trade
LABOR MARKET
Unemployment increased +0.6% in Metropole compared with the previous quarter and reached a record high 9.1% of the total working population to 2.6 million jobless. Including French Overseas Departments (DOM TOM) the total number of people seeking work stood at 9.5%. Periods of days not worked implemented at major industrial sites and in the services sector to curb job losses proved efficient, although not fully, due to the accumulation of lay-offs. A total 319 000 people were impacted by such measures or +0.6% compared with the previous quarter, or an extra 160 000 people or 1.2% of the total workforce employed, a rate similar to 1993 recessionary year. Per age group, the under 25 remained impacted the most with the jobless rate increasing +1.6% or a total 23.9% jobless compared with an average 19.5% in the Euro area. The intermediate age bracket, 25-49 saw unemployment climb +0.5% to 8.1%. The senior category, (over 50 years old) jobless rate rose +0.3% to a total 6% although a majority are officially exempt from a job search due to their age. Per gender and on the same period, male unemployment grew +0.7% and female +0.4%. The young male jobless rate grew +1.1% compared with +2.4% for young females as temporary jobs declines drastically. Whereas females between 25-49 saw unemployment stay quasi stable or +0.1%, male unemployment rose +0.9% although in proportion to a lesser degree, 7.5% against 8.4% among females. For women over 50, unemployment increased +0.5% to 6.3% of the total jobless compared with +0.2% among males or 5.8%.
Although the activity rate for the 15-64 age bracket at 70.8% neared close to the Euro area’s average 71.2%, the employment rate for the same age group at 60.1% lagged behind the Euro area’s 65.9%. In addition, the activity rate of the 15-24 stood at 37.3% or +0.2%, less than half the 25-49 age group or 89.5% at a similar growth rate. The 50-64 age bracket accounted 59.6% of activity rate but recorded the highest employment growth rate or +0.8%
Per age group, the employment rate for the 15-24 age group rated the lowest or 28.4% while falling the hardest -0.4% compared with the previous quarter. The 25-49 age group recorded the highest employment rate or 82.3%, down 0.3% on the same period. The 50-64 group employment rate observed +0.4% employment rate increase and accounted for 55.9% of people in employment. In one year to June, the number of unemployed jumped +25.7% in Metropole to 2.5 million jobless and including all categories of people seeking work (jobless, short or long term occupation, part-time work) total unemployment in Metropole stood at 3.6 million and including DOM TOM at 3.8 million. In Metropole and on the same year-on-year period, male unemployment jumped +36.4% and female +15.4%. The young male jobless rate (under 25) reached an alarming + 49.2% compared with an already dire +20.9% for young females. The 25 to 49 age bracket recorded the largest number of people out of work, 1 334 900 million, +24% in one year. Out of criteria registrations at job centers, lay-offs (including end of conversion period and other similar type contracts) jumped +53.1%, while the end of temporary assignments increased +4%. Overall job offers posted by Pôle Emploi on the same period, fell -15.3% in Metropole only and including DOM TOM -14.7%. A total 252 000 job offers on the same period remained dwarfed by jobless figures expressed in millions, a situation mostly unchanged in the last 15 years. Full time job offers (over six months) plunged -20.2%, temporary job offers dived -15.1% and occasional job offers -2.5%. Job offers at APEC, the national job center for white collars and managers, did not fare better and fell -28%.
INDUSTRIAL OUTPUT INDEX
Industrial production remained in the red, -0.8% in the second quarter but slashed the previous gap by half as heavy industrial players’ production rebounded in May and June. The manufacturing industry benefited fully from regained momentum, and climbed back to positive figures, +0.2%. Per component and on the same period, household names pushed production up as order books initiated an upward curve: the Automobile Industry output surged +11.4% as car fleet renewal led to steady consumer demand and stock reduction following prolonged periods of days not worked due to frozen assembly lines. Coke and Refinery output rebounded +7%. By contrast, the production of Electric and Electronic equipment decreased by 2.2% as inventory remained high. The Food and Agriculture Industry production fell -1.5% due to lower demand along with other manufactured products -0.4% decline.
Per industrial group, Capital Goods recorded the strongest declines: output of IT-electronic-optical equipment rescinded -0.6%, electric equipment -1.8% machinery and equipment -3.7%. Intermediate Goods textile-leather-clothing did not fare better with production falling -3.9% along with wood-paper-printing -2.1%, followed by rubber-plastic-mineral and non metallic products -1.6%. The production of chemical products nevertheless rose +1.5% and out of the Consumer Goods group, output of pharmaceutical products grew +0.8%.
Along the quarter, best performers included (in April), electronic and ITC products along with electric equipment + 0.9% , the automobile industry +1.7%, +11.6% and +5.3%, ( including May and June ) coke and refinery +10.2%, and the food and agriculture industry +0.4%. The production of electric and electronic equipment and other machinery grew +1.3% impacted by IT and electronic products +1.1%, machinery and equipment production + 1.9%, and electronic equipment +0.3%. Other manufactured products +1.9% production increase performed similarly with the output of wood-paper and printing surging +2.3%, rubber-plastic-mineral and non metallic products +2.2% , metal and metallic products +4.5%, pharmaceutical products +1.3%, and chemical products more modest +0.5%. In June, output of chemical products rose +1.6%, pharmaceutical products +0.5%, and other manufacturing industry +0.7%. In the Euro area, industrial sectors seesawed as well starting with an overall production gap in April, (Intermediate Goods -1.5%, Capital Goods -2.7% Durable Consumer Goods -0.7 and Non Durable Consumer Goods unchanged) followed by uneven rebounds in May (Intermediate Goods +0.5%, Capital Goods +1% Durable Consumer Goods -1.8% and Non Durable Consumer Goods +0.6%) and a new production dip in June (Intermediate Goods -0.5%, Capital Goods -0.3%, Durable Consumer Goods -4.2% and Non Durable Consumer Goods +0.2%).
In one year to June, core output in France remained in the red, -12.8% with the manufacturing industry production decreasing by 14.4%. The Food and Agriculture Industry production index stayed unchanged similarly to its monthly levels. Output of coke and refinery declined -6.8% slowed down by industrial players’ inertia. The production of electric and electronic equipment dived -22.6%, in direct relation with the automobile and IT markets slump: output of electric and IT equipment declined -11.6% electronic equipment’s plunged -19.4% and, machinery and equipment nose dived -31.7%. The production of transport equipment picked up, although at lower levels -13.5% as the Automobile Industry output at -23% climbed back from the previous month year-on-year abysmal -30.3% level. On the same yearly period, the production of other manufactured products fell -15.6% with four components, textile-leather-clothing-footwear, wood-paper-printing, metal and basic metal products and pharmaceutical products observed output deterioration. Inversely, the production of chemical products climbed to -12.4% (from -13.4%), rubber-plastic-mineral and non metallic mineral products to -19.2% (from -21%). In
the Euro area, production improved modestly to -17% (-15.6% in the EU 27) from the previous month -17.6% as output rebounds recorded by Intermediate Goods, Capital Goods and Non Durable Consumer Goods pushed the index up. Nevertheless, performances stayed in the red as productions fell respectively : Intermediate Goods -22.2% (from -23.1%) Capital Goods -21.9% (from -23%) and Non Durable Consumer Goods -2.2% (from -2.9%). The production of Energy dipped further -9% (from -7.3%) as well as Durable Consumer Goods to -24.9% (from -19.8%). Among France’s major trade partners, output in Germany fell back to -19.3% due to the June deceleration, and similarly in Italy to -21.9% (from -19.9). Inversely, production climbed back in Spain to -16% (from -20.5%) and in the UK to -11.4% (from -12.3%).
PRODUCER PRICES INDEX
Producer prices on the domestic market fell -1.1% compared with the previous quarter and in the Euro area a more substantial -1.5% on the same period. However, the price index in France reached its lowest level, at 104.6 similar to the value index of 104.7 in 2006 and below 106.7 the following year, as a direct result of successive price cuts to boost demand and for ten consecutive months up to May. In the Euro area, the quarterly index averaged 108 compared with 106 three years earlier and at 107 in 2007. France’s major trade partners, Germany, Spain, Italy and the UK, whose producer prices had recorded irregular increases from last year, re-aligned with most producer price increases in the EU 27. Per industrial sector and in the Euro area, producer prices rescinded in April, slightly less in May, and stabilized overall in June. In monthly variances, groups affected the most by producer price cuts reflected a lack of consumer demand as well as a general industrial slow down: the Intermediate Goods sector producer prices fell -0.6% in April and only showed signs of steadiness at the end of the quarter unlike Capital Goods prices, stable from February and throughout this second quarter. Durable and Non Durable Consumer Goods prices performed similarly unlike Energy producer prices, dropping at the beginning of the quarter followed by two consecutive peaks. In the EU 27, producer prices mirrored such overall trend, and, including energy prices.
In one year to June, producer prices in the Euro area fell -6.6% (-6.7% in the EU 27). Capital Goods and Durable Consumer Goods producer prices remained on the increase but at a much slower pace compared with earlier months, respectively +0.3% and +1.5% indicating that demand rebounded although cautiously. By contrast, Energy prices recorded their sixth consecutive decline and fell -15% and Non Durable Consumer Goods -2.9%. On the same year-on-year period, France’s producer prices decreased by 8.6% Germany’s by 4.3% Italy’s by 7.2% Spain’s by 5% and the UK’s by 8.5%. Out of the EU 27, Denmark observe the strongest producer prices cut, -11.2% followed by the Netherlands -13.2% and Belgium -9.4%. Inversely, prices rose in Malta +21.2%, in Hungary +2.1% and in Romania +1.3%
GROSS DOMESTIC PRODUCT
GDP grew +0.3% allowing France to bounce back from the recession following four consecutive quarters of negative growth. A surge in exports, +1% due to manufacturing +1.6% rebound, lower imports -2.3% and consumer consumption, although modest, at +0.3% contributed to pushing up GDP. However, declining investments -1% (-2.6% in the previous quarter) and stocks at -0.6 points impacted GDP downwards.
Output of goods and services in volume picked up +0.5% on the same quarterly period due to the automobile industry +5.6% production increase leading manufacturing to grow +1.1%
Total contributions led to impact GDP 0.9 points compared with a net loss -0.2 point in the previous quarter. In the Euro area, GDP fell -0.1% and in the EU 27 -0.2%. Year-on-year to the same quarterly period, GDP declined in each region - 4.7% and -4.8% , according to Eurostat first estimate. The Euro area‘s household consumption grew +0.2% while investments fell -2% along with exports -1.1%. Imports decreased by 2.8%. In the USA, GDP fell -0.3% in Q2/09 but dipped -3.9% compared with Q2/08. In Japan, GDP grew +0.9% in Q2/09 and -6.5% on the same period
HOUSEHOLD CONSUMPTION of MANUFACTURED PRODUCTS
Household consumption of manufactured products increased +0.7% compared with the previous quarter to € 21 803 billion pushed up by sales of Durable Goods +2.6% to € 8.7 billion with car sales accounting for € 2.58 billion and up 5.8% due to car fleet renewals. On the same quarterly period, sales of textile-leather products fell -0.3% and other manufactured products (pharmaceutical products, tires, auto repair equipment and products, book printing, bookstores, records, d-i-y, clocks and jewelry, perfumes, optical and photo equipment, and miscellaneous products) -0.1%. Month-on-month along the quarter, household consumption surged in April +0.6% boosted by two weeks of sales that same month and similarly in June +1.4% demonstrating consumers’ selection for basic goods rather than superfluous products: whereas in April sales of textile-leather goods and other manufactured products fell each -0.1%, sales of household equipment increased +0.5% and car sales +3.8%. In May, car sales remained positive due to the car fleet renewal scheme while inversely sales of other durable goods dipped. June sales performed better than April as households confidence returned pushed up by a series of factors --record low inflation, subdued oil prices, car fleet renewal incentives, and additional stimulus packages-- bringing some relief to households’ concerns over the economic downturn. Sales of textile-leather products rebounded +3.6% other manufactured products +0.5%, and household equipment +3%. Car sales fell -0.2% but may have resulted from the new car plates system delay preventing registrations to be effective immediately and thus carried over the following month.
In one year to June, overall household consumption of manufactured products mechanically increased +1.2% impacted by June sales although a record low inflation rate, secured income brought about by social measures amid the financial crisis accounted for the most part for consumer spending rather than confidence. Sales of Durables Goods grew +4.7% to € 8.7 billion due to car sales +8.5% to € 2.9 billion, the fourth and strongest consecutive increase since February as a result of car fleet incentive renewals. Sales of household equipment leaped +2.2% to € 5.7 billion , the first increase since February. Sales of textile-leather products climbed back from the red but still fell -0.1% to € 4 billion followed by other manufactured products down 0.6% to € 9.3 billion.
ORDER BOOKS INDEX
Order books fell -1.4% compared with the previous quarter as new industrial orders stayed flat in May while the Euro area’s increased +0.2% due to two negative consecutive months (April -0.3% and in and May -0.8%). In the EU 27 and on the same quarterly period, new orders fell -2.3% as orders observed substantial declines in April -1.6% and in June -0.6%. Out of France’s major trade partners, orders in Germany jumped +4.4%, declined by a substantial
7% in Spain and by 2.9% in Italy compared with a lesser drastic 0.2% in the UK. Month-on-month and along the quarter per industrial sector in the Euro area, orders of Non Durable Consumer Goods performed best as April and June positive performances, respectively +1.7% and +3% offset May gap (-1.1%). New orders of Intermediate Goods stayed quasi stable in May or +0.1% while April and June saw orders rescind -0.1% and -0.7% Orders of Durable Consumer Goods remained negative throughout the quarter, -0.5%, -0.9%, and -2%, due to high stocks. In the EU 27, new orders of Intermediate Goods stayed positive in April and May +0.2% and +1.1% and fell similarly to the Euro area’s in June. Capital Goods unlike the Euro area’s observed a major gap in April -2%, while May and June recorded mild orders intake +0.4% each month.
Durable Consumer Goods new orders rose +1.9% in April but decreased by 0.2% and by 2.9% the following months. Non Durable Consumer Goods fell -0.9% in April but picked up in May and June +0.5% and +1.5% but to a lesser extent than the Euro area’s. In one year to June, France’s order books climbed to -21.5% stagnating around -22% while the Euro area’s gained over five percentage points at -25.7% and in the EU 27 at -24.5%. Due to June’s gain, new orders of Capital Goods climbed back to -26.4% from the previous month year-on-year abysmal -32.6%. Non Durable Consumer Goods came out of the red, and stayed quasi stable with orders increasing +0.1% unlike Durable Consumer Goods, with new orders sliding to -20.9% and Intermediate Goods to -31.1%, down three percentage points. All EU 27 member states remained in negative figures although improvements were noticeable among several member states.
CONSUMER PRICES INDEX
Consumer prices rose +0.4% compared with the previous quarter as some services pushed the index upwards although yearly inflation in Metropole stabilized for the fourth consecutive month at 1.5%. Including French Overseas Departments (DOM TOM) yearly inflation stood at a record low -0.5%. In the second quarter, food prices fell -0.3% while manufactured products prices increased a steep +0.9% followed by services +0.6%. Energy prices remained stable. At the sub-component level and on the same period, dairy products along with oil and fat observed price index cuts, respectively -1% and -1.9% while fruit prices jumped +8.4%. Out of manufactured products, the clothing price index decreased by a modest 0.6% Combustibles, out of the Energy component, recorded the steepest increase +11.3% inversely to gas prices -9.3% while Services accumulated a series of major price gains: transport prices jumped +2.3%, with the ship fares price index soaring +8.7%. Communication prices increased +1.6% as telecom and fax equipment prices rose +1.7%. Recreation prices fell -0.4% as sub components including photo equipment saw prices fall on average -5% while other sub components, vacation package +6.2% and holiday accommodation +4.6% inflationary prices index pushed prices up. Several price cuts on the same period averaged -1.2% to 2% but manufactured products accounted for the post part for the most substantial price declines: video and photo equipment prices index dipped -4.1% . In one year to June, food prices decreased by 0.4%, due to fresh produce -9.2% price decline, and excluding fresh produce rose +1%. Tobacco prices increased +0.8% while manufactured products prices stayed stable with clothing and footwear prices falling -0.6%, and health products -1.5%. Other manufactured products prices rose +0.4%. Unlike the month upward trend, energy prices dipped -17.4% mirroring crude oil prices constant decline. Oil products prices dropped -26.1% while by contrast, services +2% gain recorded the index steepest price increase: water-rent-garbage removal prices climbed +2.9%, health services +0.9% transport and communications +2.3% and other services +2.8% .
In June, annual INFLATION in the Euro area posted a negative -0.1% for the first time since the currency creation in 1999. A year ago, inflation was 4%. In the EU 27, annual inflation stood at 0.6%, (4.3% a year ago) and monthly inflation at 0.2% In the Euro area, the main components with the highest annual rates in June 2009 were alcohol & tobacco 4.4%, miscellaneous goods- services 2.1% and hotels and restaurants 1.9% The lowest annual rates were observed by transports -4.8% communications -1% and housing -0.5%
The main components with the highest monthly rates were transport 1.4%, alcohol & tobacco, and hotels-restaurants 0.3%. The lowest monthly inflation rates were clothing -1.1% and food and communications each -0.3%. Fuels for transport +0.22 percentage points, tobacco, heating oil and fruit +0.04 each had the largest upward impacts. Garments and vegetables had the biggest downward impacts respectively -0.07 percentage points and -0.05.
CONSTRUCTION OUTPUT INDEX
Construction output fell -0.7% in the second quarter remaining in negative figures for the fourth consecutive period similarly to the Euro area and the EU 27 where construction fell respectively -1.7% and -1.6%. Building works in the Euro area decreased by 2.7% due to the severe impact of the economic downturn on the real estate sector while civil engineering works rose +0.3%, even more so in the EU 27 +2%, initiating a surge thanks to stimulus packages to jump start that sector’s activities via roads, highways and bridges renovations from the first quarter. In one year to June, construction fell -4.8%, the Euro area’s dived -7.8% and the EU 27 -9.2%.
Civil engineering works posted positive figures, +1.7% in the Euro area and +7% in the EU 27 unlike building works output tumbling respectively -10.9% and -12.8%. In variances and compared with the same quarter of the previous year, construction output in France fell -5.2%, in the Euro area -5.2% and in the EU 27 -8.8%. Germany, the Czech Republic and Poland remained the exception with production rising respectively +3%,+1.2% and +0.4%. By contrast, Latvia where construction had reached record high production saw output plunge -32.4%
RETAIL SALES INDEX
Retail sales increased +1.2% compared with the previous quarter unlike the Euro area’s -0.3% decline and the EU 27 where sales remained flat. France’s retail sector benefited from periods of sales which boosted consumer spending as households concentrated on basic purchases rather than the superfluous due to the economic downturn. Month-on-month in the Euro area, only two sectors, food-drinks-tobacco and automotive fuel in specialized stores posted positive retail sales in April, respectively +1.1% and +2.1% (+1.3% and +1.5% in the EU 27). Sales of electrical goods and furniture remained nearly unchanged or +0.1% (+0.3% in the EU 27) while all other retail items saw sales decline: textile-clothing-footwear -0.7%, (0% in the EU 27) computer equipment, books and other -0.1% (+0.2%), pharmaceutical and medical goods -0.1%, mail orders and internet -4.2% (-3.1% in the EU 27). May recorded a substantial retail sales gap with the exception of pharmaceutical and medical goods +0.3% (0% in the EU 27) and mail orders and internet +2.3% (+1.4% in the EU 27). In June, retail sales stayed modest in the Euro area: textile-clothing-footwear +0.6% (+2% in the EU 27) computer equipment, books and other +0.5%, mail orders and internet +0.2% (+0.5% in the EU 27).
In one year to June, France’s retail sales grew +1.1% while retail sales dipped -2% in the Euro area and in the EU 27, -1.5%. In the Euro area, only pharmaceutical and medical goods retail sales rose +1.3%, (0% in the EU 27) while all other sectors retail sales fell: automotive fuel in specialized stores -8.1% (-7.6% in the EU 27), electrical goods and furniture -4.6%, (-5.3% in the EU 27), mail orders and internet -3.2% (+0.8%), food-drinks-tobacco -1.3% (-0.9%), textile-clothing-footwear -1.4% (+2.6%), and computer equipment, books and other -0.7% (-1.6% in the EU 27). On the same yearly period, and out of France’s major trading partners, the UK retail sales rose +2.2% while in Germany retail sales decreased by 2.3%, in Spain by 3.9% in Spain and in Italy by 0.6% .
EXTERNAL TRADE
Exports fell -0.9% compared with the previous quarter to € 83 200 billion while imports decreased by 0.4% to € to 96 673 billion resulting in a lesser cumulative trade gap, € -52 926 billion in one year to June, compared with € -54 244 in May. Along the quarter, exports increased the most in May and underperformed in June, -1.7% as only three sectors posted positive figures that same month impacting the manufacturing industry exports downwards, -1.5% or € 25 655 billion with a trade gap widening to € -2163 billion. The food and agriculture industry exports surged +1.2% or € 2772 billion with € 354 million trade surplus, refined oil products +17.3% or € 807 million (€ -264 trade deficit) and pharmaceutical goods +11.2% or € 2168 billion and in excess of € 353. Sectors which pushed down manufacturing included transport equipment, with exports declining -12.6% but a positive trade surplus of €132 million, electric-electronic equipment with exports decreasing by 2.1% and €-1243 trade deficit. Other manufactured goods exports including textile-clothing-leather-footwear fell -0.1% along with rubber-plastic-mineral products and metal-metallic products while exports of wood-paper-cardboard products remained unchanged allowing their trade deficit to steady. Chemical products-pharmaceutical-cosmetics observed quasi stable exports or +0.1%
Per region and in June compared with the previous month, exports to the European Union rose +1% and declined -0.2% to the Euro area. Exports to Europe excluding the Union jumped +6.5%. Exports to Africa fell -10.5% to the Americas -14.8% to the Near and Middle East -10.1% to Asia -2.2% and to the rest of the world -9%. Only two regions, Africa and the near and Middle East recorded solid trade surpluses, respectively €47 million and €626 million while the trade gap worsened with other regions. Per country, exports to Russia jumped +19.6% but dipped -8% to the USA , and a lesser drastic -0.3% to China and Hong Kong.
The trade gap doubled with the USA to €-677 million, widened to €-1 729 billion with China and Hong Kong but shrank nearly by half with Russia to €-122 million. Out of France’s major trade partners, exports to Germany declined a substantial -7.2% taking the trade gap to €-1 274 billion nearly twofold in one month. Exports to Italy increased +3.7% (€-167 million trade deficit), to the UK +6.4% (€596 trade surplus), and to Spain +1.7% with €234 million trade surplus.
