2023-12-16 04:00:04
Lhe French government has set itself the objective of reindustrializing France, starting from a situation where the manufacturing industry no longer represents 10% of added value and 9% of total employment in France. The law of October 24 on green industry advocates the creation of an industry for the energy transition (electric batteries, heat pumps, electrolysers for the production of green hydrogen, carbon capture and storage, etc.), with the aim of decarbonization of French industry.
This law reduces the deadlines for carrying out industrial establishments and the decontamination of industrial sites, creates a tax credit for investments in green industries, reorients public procurement towards virtuous companies from an environmental point of view and develops the training of engineers and technicians. Unfortunately, we must fear that the reindustrialization of France will remain limited, as there are so many factors penalizing it.
Certainly, industrial employment has increased by 62,000 employees since 2017, but this is primarily the consequence of the decline in industrial productivity, and not of a recovery in industrial activity. : the added value of the manufacturing industry is today almost 10% lower than its mid-2019 level, and at the same level as in 2006. The trade balance deficit for manufacturing products reaches almost 100 billion euros in 2022, and continues to deteriorate; the last year it was balanced was 2006.
Catch-up cost
The first obstacle to true reindustrialization of France is the high level of production costs. For example, relocating industrial production from China amounts to doubling the price of production; the price of natural gas is four times higher in France than in the United States. The hourly labor cost is 18% higher in France than the European Union average, 11% higher than in the United Kingdom, three times higher than in Poland, Slovakia or Hungary, five times higher higher than in Romania. Relocating or developing the industry in a country where production costs are high is obviously difficult.
The second obstacle is that France does not have resources in industrial raw materials (rare earths, copper, nickel, iron, etc.). This generates a disadvantage compared to countries that have them (China, Brazil, Russia, Canada, India, Indonesia, etc.), and a dependence in the event of conflict around the monopolization of raw material reserves.
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