Despite all government plans, French industry will still lag behind in Europe in 2030

SAM in Aveyron, Ford in Blanquefort, near Bordeaux… the list of plant closures has continued to fill up during Macron’s last five-year tenure. The two long years of the pandemic have plunged the already weakened tricolor industry into a deep lethargy. After several restrictions and chain chaos in the planet’s main trading ports, the industry has paid a heavy price in this deep crisis. The outbreak of conflict in Ukraine and the zero-Covid policy being pursued in China have once again dealt a serious blow to Made in France, even if French industry has regained its colors and investment has surged since 2021, according to the Trendeo Employment Observatory factory creations in France will increase sharply in 2021, with a positive balance of 120 new factories (176 creations and 56 closures).

Reindustrialization of France: After 2021, a year of records, 2022 promises to be darker (Trendeo)

In the face of all these crises, the government has indeed multiplied its plans in recent years to try to limit the slump and reindustrialise the tricolor economy, which has been badly hit by decades of relocation. Between the stimulus package, the France 2030 plan and the resilience plan announced in the spring, the executive hopes to get them under way “industrial reconquest” as he has repeatedly announced. It prevents. Despite all these talks and plans, the industrial “remontada” could last for decades.

France, outsourcing champion according to France Strategy

2 GDP points more by 2030, France still lags behind Europe

After years of outsourcing, manufacturing’s share of France’s gross domestic product (GDP) has fallen to around 10%, one of the lowest levels in Europe. According to an assessment published this Thursday, May 12th by the consultancy and auditing firm PwC France (PricewaterhouseCoopers), the sector would recover 2 points of French GDP by 2030, reaching 12%.

For comparison: the average in Europe is 16%. In Germany, this share rises to 21% for manufacturing, 19.7% in Italy and 16% in Spain. “France is one of the most deindustrialized countries in Europe. Only Luxembourg, Cyprus or Malta follow us. I think we are unaware of the state of our industry. In terms of quantity, France is starting from such a low base that this is not possible even with very considerable efforts failing to catch up with the European average”, to explain The gallery Olivier Lluansi, partner at PwC and former industrial consultant at the Elysée.

Almost 100 billion euros in investments by 2030

The effects of the various plans and relocations on investments are nevertheless relatively significant. According to calculations by the consulting company, the 98 billion euros in public and private investments could generate an annual added value of 68 billion euros. “These numbers have been unheard of for 40 years. It’s an effort that hasn’t been made in a very long time.” emphasizes the industry expert. The fiscal multiplier retained in the reference scenario is that one euro of public money invested would generate 2.5 euros of private investment.

A few large sectors will be the biggest beneficiaries of these various plans. “These are electronic components and the manufacture of pharmaceutical products, electric vehicles, the recycling of plastics and building materials, especially through the decarbonization of these industries.“, completes Olivier Lluansi, former delegate for the industrial zones launched by former Prime Minister Edouard Philippe in November 2018 under the dome of the Grand Palais.

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431,000 jobs created by 2030

On the employment front, all of this investment could also bode well for years to come. “All of these plans would create 431,000 direct and indirect jobs. by 2030. These are conservative assumptions,” explains Olivier Lluansi.

But again, these creations would be far from offsetting the hundreds of thousands of jobs destroyed since the various oil crises of the 1970s, a time when the weight of industry was nearly 22% of the economy. “Between 1974 and 2018, industries lost almost half of their workforce (2.5 million jobs), industry now accounts for only 10.3% of all jobs,” explained the latest report by the parliamentary commission of inquiry into deindustrialisation.

Reindustrialization, the challenge for the next five years

At the presentation of his presidency program in Aubervilliers in the spring, Emmanuel Macron emphasized the need for France’s reindustrialisation. This policy was to be carried out notably through the extension of production tax cuts and through the France 2030 plan, which was unveiled to great fanfare in autumn 2021 at the Elysée Palace to an audience of ministers, business leaders, economists and students.

“To be successful in this reindustrialization, we must work on new technological challenges while working with the territories. This reindustrialization of territories can go through the production of Mulliez jeans or even Daan Tech dishwashers. This second lever is not enough to be developed in public policy: for example, a territorial approach would make sense in the France 2030 plan“, emphasizes Olivier Lluansi.

On the eve of the appointment of a new government, Emmanuel Macron knows he has to tackle this dossier if he doesn’t want to get into trouble quickly.

Reindustrialization, an imperative for Macron II’s five-year tenure