(See Tables a and B, Pages 2 and 3) Since 1938, a Substantial S
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Trade Development Summary 17 November 1953 FRANCE (a) Production (See Tables A and B, pages 2 and 3) Since 1938, a substantial shift has occurred in French industrial production: the emphasis given to consumer goods has declined considerably in favour of other commodities. By 1952, the production of industrial consumer goods stood at the pre-war level, whereas the output of metals and engineering products was nearly two-thirds, and that of chemicals and fuels and energy, nearly three-fifths, above pre-war. Building materials and building, at about 40 per cent above 1938, occupied an intermediate position. In the first quarter of 1953, production was generally lower than in the first quarter of 1952. The decline was particularly heavy in chemicals, consumer goods and building. There was not much change in metals and engineering and fuels. In the second quarter of 1953, production improved in comparison with the first quarter, whereas in the corresponding period of the preceding year it had declined. By mid-1953 consumer goods exceeded, while fuels and energy, chemicals and building equalled, the level of a year ago. Metals and engineering products, on the other hand, were nearly 7 per cent lower. Industrial production as a whole, while still lower than in the corresponding quarter of 1952, was somewhat above the average level of that year. Agricultural production has generally been increasing since the end of the war. According to preliminary figures the 1953 yields per acre planted to cereals are expected to set post-war records for wheat and barley. Except for rye, the 1953 yields are higher than pre-war. For the first time since the war, total output of grains will be above the level of the 1930's, in spite of a decrease by about one-quarter in total area planted. Meat and milk production in 1952 were 14 and 4 per cent, respectively, higher than in 1934-38. Wine production in 1953 is also expected to be large. The increase in agricultural production, actual and prospective, has l'çd to lower wholesale prices of foodstuffs. In the 12 months ending August 1953, the decline nearly reached 10 per cent. The corresponding decline in retail food prices was only 3 per cent. Wages, on the other hand, continued to increase slowly. In spite of a satisfactory rate of increase in productivity since 1950, labour costs per unit of manufacturing output have increased more than in other countries with which France competes in foreign markets. MGT/10/54 TABLE A Industrial Production. 1949 - 53 (1938 = 100) -\ Annual index numbers iQuarterly index numbers Industrial —l .— Branches 1949 1950 1951 1952 1S|52 I 1952 II 1953 I 1953 II Total, incl. building 123 123 138 144 149 149 141 146 Metals and engineering 140 131 149 172 173 178 170 166 Chemicals and rubber 132 145 163 157 168 164 151 165 Consumers'goods 94 102 112 99 113 i 101 100 108 i ; Building and building materials 124 124 134 141 133 149 123 147 jTufels and enorgy 125 133 148 156 102 152 165 152 j'ote: The index numbers have been recalculated from the various series published in Bulletin Mensuel do Statistique (I.N.3.E.E.)» The index number for the engineering industry which carries a weight of nearly one-third of the total, is calculated on the basis of steel deliveries to that industry. Since it does not, therefore, take account of stocks held by the consumers, its movements are unreliable, especially over short periods. - 3 - TABLE B Production, Productivity and Labour Costs in France 1950 - 100 France W. Germany U.K. U.S.A. ïfenufacturing production 1951 114 121 104 109 1952 118 129 99 109 1953* 116 130 105 119 Manhours worked 1951 104 109 103 107 1952 104 111 101 107 1953* 101 113 102 113 Output per manhour 1951 109 111 102 103 1952 114 116 98 103 1953* 115 115 103 116 Hourly wages 1951 128 115 110 109 1952 149 123 118 114 1953* 151 125 118** 119 Wage cost per unit of output 1951 117 104 108 106 1952 131 107 121 112 1953* 131 109 115 102 * First quarter. ** Estimated. - 4 - (b) The Terms of Trade A further indication of the influence of domestic prices on external trade may be found in the slow but continuous "improvement" in the terms of trade which, in spite of the fact that prices of imported goods have been declining throughout 1952 and the first half of 1953, has been attributable to the much slower rate of decrease of export prices. Export prices in the first half of 1953 have been 6 per cent lower compared with the corresponding period of last year, whereas those of imports were 13 per cent lower. In comparison, average prices of exports and imports for all OEEC countries combined fell to a similar extent in the case of exports but somewhat less for imports. Comparing development of the volume of French trade on the same basis, French exports increased somewhat more than the average but imports declined by a few points whereas they increased by 4 per cent for all OEEC countries. (c) The Balance of Trade TABLE C French Trade Balances (Billion Francs) 1950 1951 1952 1951 1952 1953 year year year I+II III+IV I+II III+IV I+II | Dollar Area -104 -125 -138 - 41 - 84 -106 - 32 - 41 Sterling Area -105 -240 -282 -123 -117 -159 -123 -141 of which OEEC Members + 26 - 5 - 64 * 13 - 18 - 35 - 29 - 30 1 Other OEEC Countries • 91 * 23 + 28 - 35 + 58 , - 14 * 42 • 50 Other Countries + 12 * 3 -22 - 6 + 9 - 20 1 - 2 + 6 Total Foreign Trade -107 j -338 | -413 i -113 j -225 j -299 j -114 I -125 ; Overseas Territories +107 +211 +238 + 83 +127 •131 +109 ;+ 76 1 GRAND TOTAL - -127 -175 - 30 - 98 -167 - 5 j- 49 j Source: Bulletin Mensuel de Statistique, Ministère des Finances. - 5 - A certain degree of success has been achieved by the efforts to narrow the import surplus which had been developing since early 1951 and which culminated in a record post-war deficit in the first quarte..- of 1952. Since that time, the combined effects of falling prices and lesser internal demand, together with those of restrictive measures, had even produced a small export surplus during the third quarter of 1952. But during 1953 a trade deficit emerged anew, although this, in the first quarter, amounted to only just over a third of • that which existed a year ago, and again declined sharply in the second quarter. Excluding trade with the overseas dependencies, the improvement was less pronounced and the trade deficit in the first and second quarters was about two-fifths of what it was a year earlier. Apart from the continuously serious deficit vis-à-vis the dollar area, the main cause of the more recent deterioration has been trade with the sterling area. The surpluses achieved vis-à-vis the overseas territories and the Continental OESC countries have been insufficient to restore the balances, as they did in 1950. Owing to the uncertainty regarding the exchange value of the French franc there have, during those last few years, occurred discrepancies in the timing of purchases of foreign currencies and imports as shown by the trade returns. Thus, many imports which actually took place in 1952, had already been paid for during the preceding year, with the effect that payments for imports in 1952 failed to reflect the actual movement of goods. Furthermore, there also appears to exist a fairly continuous lag in the return from abroad of export proceeds' which creates further discrepancies between the balance of payments and the trade returns. These-practices may continue to alter the effects of actual t--a&»--wp©a-the country's payments position. EXPORTS (a) Value and Volume The fluctuations in the value of French exports have been limited as between the last five half-yearly periods since the beginning of 1951 (see table D). Within these periods, however, there has been noticeable a downward tendency up till the summer of 1952 which was reversed thereafter. The fluctuations in the volume of exports have followed closely on those •f in value. - 6 - (b) Direction TABLE D French Exports iBillion Francs) 195Q 19511 1952 1951 1952 ! 1953 yeaij year year I+II j III+IV I+II ; III+IV j I+II Dollar Area 60 ! >16 77 61 55 41 36 52 Sterling Area 142 ! 209 152 112 97 84 66 75 of which OEEC. Men*a*s; ne- inr .102. 8§ 69 55 47 52 j Other OEEC countries 353 420 418 225 195 198 220 234 ] Other Countries 131 188 170 92 96 85 85 87 Total Foreign Trade < 685 934 818 489 445 407 411 449 Overseas Territories 387 546 598 I 249 296 318 280 270 ! (GRAND TOTAL 1,072 1,480 1,416 j 738 741 726 691 ; 719 Source: Bulletin Mensuel de Statistique, Ministère des Finances During the first half of 1952, when the tendency in .the monthly value of exports was still in a downward direction, the share in the total going f destinations outside the French franc area was at its lowest also, i.e. at 56 per cent. During the remainder of the year, there was a change in'this situation, not only as a result of an increase in the exports to non-sterling OEEC countries, but also from a decline in sales to the colonies. By the enft of the first half of 1953, exports to the dollar and sterling areas also shov«<i signs of revival, while exports to the overseas territories continued to decliat.