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«
(c) Composition TABLE E
Composition of French .Exports (Billion Francs)
1 1950 1951 1952 ! 1952 1953 ! year • year year 1*11 I+II 1 I I Consumer Goods ) F.C. 235 267 200 100 100 1 (Food & Manufactures) D.O.T 227 307 331 167 156 )
: Raw Materials and ) F.C. . 385 567 504 250 293 | ) ; Semi-Manufactures B.O.T 91 139 164 92 70 ) F.C, i 65 100 113 57 56 Capital Goods ! B.O.T. 68 99 103 59 45 i i F.C. 685 934 817 i 407 449 •TOTA L j D.O.T. 386 545 598 318 271
Source: Bulletin Mensuel de Statistique, Ministère des Finances
In 1952 and the first half of 1953,somewhat less than one third of all exported consumer goods consisted of foodstuffs, the rest being manufactures. Of the foodstuffs exported more went to the colonies in 1952 and the first half of 1953 than to other destinations whereas formerly (1950 and 1951) foreign countries were the best customers for these products. In the case of all other consumer goods, the D.O.T.'s have, in recent years, been the most important market. In 1952 they took almost twice as much of these products as all other destinations combined.
Exports of raw materials and semi-manufactures have become steadily more important in total exports (50 per cent in the first half of 1953), in the current year especially on account of sales to non-franc countries of more fuels and semi-finished textile products. On the other hand, smaller sales of textiles were the main reason for the drop in this category of exports to the colonies.
The share of capital goods in exports has tended to go up in recent years to about one-sixth of the total, until, in the first half of this year, there was a sudden decline in this proportion due to lower exports to the D.O.T.'s. - 8 -
IMPORTS
(a) Value and Volume
The drastic reduction in imports which took its full effect in the second half of 1952, came to a halt in the third quarter of the year. Imports rose again in the fourth attaining a level, during the first 6 months of 1953,which was 14 per cent lower than in the same period of the preceding year. The monthly movements were smaller than at any time in 1952. In spite of the large reduction in value, the volume of imports, in the first half of 1953, was only a fraction lower than a year before.
(b) Origin TABLE F
French Imports
(Billion francs)
1 1 1 ! 1 1950 1951 1952 1951 1952 1953 j year year year I-II III+IV I+II III+IV I+II
Dollar Area j 164 241 215 102 ; 139 147 68 93
Sterling Area 247 449 434 235 214 243 191 216
Of which OEEC Membersj 86 162 166 75 87 90 76 82
Other OEEC Countries 262 397 390 167 230 212 178 184
Other Countries 119 : 185 192 98 87 105 87 81 | l Total Foreign Trade 792 1,272 1,231 602 j 670 706 525 574 j Overseas Territories 280 335 1 360 166 j 169 187 171 194 i GRAND TOTAL 1,072 : 1,607 1,591 768 839 893 696 768
Source: Bulletin Mensuel de Statisti quo, Mi nistère des Finances
In 1950 and 1951 when the value of most imports rose strongly, those from the sterling area, and in particular its non-European members, grew more than others bringing their share from 23 per cent to 28 per cent, at which level they have since remained. After some fluctuations, imports from the D.O.T.'s have - 9 -
recovered in the first half of 1953 to reach one-quarter of all imports thereby attaining a higher level than imports from the non-sterling OEEC countries whose share has been constant at almost another quarter for several years. On balance, dollar imports have given way most, especially following their severe curtailment during the second half of 1952.
(c) Composition TABLE G
Composition of French Imports (Billion Francs)
1950 I 1951 i 1952 1952 ! 1953 year I year I year I+II I+II
Consumers Goods ) F.C. 152 226 208 123 98 ) i (Food & Manufactures)) D;0.T. 218 226 262 135 ; 149
Raw Materials-ana ~F.C 533 92P _ 301 319 .-407 ) Semi-manufactures ) D.O.T. 61 108 97 51 ! 44
F.C. 107 119 123 64 ! 68 Capital Goods D.O.T.
F.C. 792 |1,273 |1,232 706 573 TOTAL D.O.T. 279 i 335 359 186 193
Source: Bulletin Mensuel de Statistique, Ministère des Finances
Among imports, manufactured consumer goods, represent only a fraction. Foodstuffs, industrial raw materials and semi-finished products combined, account for nearly nine-tenths of total imports. The large reduction in the value of imports during the first half of 1953 has especially affected imports of textile raw materials (mainly during the first quarter), non-ferrous metals, rubber and wood pulp, all of which are imported mainly from outside the French franc area. Of foodstuffs, the bulk comes from the overseas territories. There are indications that imports of grains and vegetable oil products from the colonies are increasing in favour of those from other sources. - 10 - Basic Data Country; France
1938 1950 1951 1952 1952 1953
Year Year Year Year J F M | A M J ! J A S 0 N D J F M A M J
1948 = 100 PRODUCTION Total Industrial 90 111 125 131 136 137 1371136 133 132 123 105 128 134 134 131 130 131 130 129 130 130 of which:- i Producers !i goods 83 108 122 137 132 135 140:142 142 142 140 114 138 143 139 133 127 131 134 134 136 Consumers j goods 98 108 119 107 123 122 119 |U6 108 106 86 76 102 107 112 107 106 108 111 111 117 Total Agricultural xoi2 112 108 111 r r TRADE Terms of -' Trade 86 85 78 87 —»82 4~- — i 86 t~ t 91 <- -K89f- -V 90 <— -^92^-
Volume of • Exports 200 237 209 —t 213 -V 207 <— / 184 -r- —> 225 <— \ —* 216 t~ —>• 228
in million $ U.S. Sources : 0EEC/IMF Statistical Bulletins. average 1936-1938