On Sunday 7th of May, French citizens are going to the polls for the second round of voting for the new French president. As we all wait to know the results of the most unpredictable and the most high-stakes election in decades, we take a look at how the manufacturing sectors in France and the UK compare.
1. #MadeinFrance & #MadeinBritain – the numbers
French and UK manufacturing sectors share a lot in common. Both sectors have nearly the same size in terms of gross value-added and employment. They also represent almost the same share of the economy as a whole.
The main differences, and they are important, are in trade and innovation. French manufacturers export more (in terms of value), and account for a bigger share of France’s total overseas sales than their UK counterparts. Business R&D expenditures in the manufacturing sector are higher in France than in the UK.
2. Who makes what?
France’s and UK’s sectors of specialisation are quite similar. Manufacturers on either sides of the channel produce lots of cars, planes, pharmaceuticals and food and drink products. But who specialises most in what?
A comparison of specialisation indices shows motor vehicles and pharmaceuticals represent a bigger share of total manufacturing in the UK, while the food and drink industry is more predominant in France. It is worth noting however that differences are small: it barely exceeds 3 percentage points of manufacturing value added.
Note: To measure a country's relative specialisation, we use the Hoover-Balassa index, which allows a comparison of value added aaggregates between France and the UK. For example, the UK's specialisation index in motor vehicles refers to the share of the sector in total UK manufacturing relative to its average share in manufacturing in France and the UK combined. The value of 1 means that the sector has the same weight in both countries - the chart shows differences in specialisation from the average value.
3. Productivity – le sujet qui fâche*
If you have seen a UK politician speaking about the economy, you have already heard this quote: “By Thursday lunchtime France has produced as much as it takes us to produce by Friday afternoon when we knock off work”. This tells a lot about the UK productivity puzzle.
Yet there are a number of caveats when we compare hourly productivity that one should be aware of. In particular, there are huge differences between the two countries in terms of average hours of work, employment and participation rates. Taking this into account reduces the gap, but France would still have a productivity lead.
*the vexing question
4. How does the UK’s trade deficit with France break down?
In 2016, the UK’s trade deficit with France amounted to £ 5.2 billion according to UK trade info. In terms of products, it is fairly broad-based; yet food and drink represent more than a quarter of the UK’s deficit with France.
5. Whisky or wine?
In terms of alcohol, it is all about sharing. According the French Federation of Spirits, 90 per cent of the Whisky sold in France comes from Scotland. And France is the fourth largest wine supplier to the UK – after Australia, Italy and the US.