In its latest review of French competitiveness, the Rexecode institute paints a mixed picture. Despite a slight recovery in export market shares since 2022, the decline since 2019 has not been erased, and France experienced a record external deficit in 2022 since 1948. Olivier Redoulès, Director of Studies at institute, analyze the situation.
L’Express: How can this rather gloomy observation be explained when numerous measures have been implemented to improve competitiveness?
Olivier Redoules: Some causes are cyclical, and others more structural. The rise in energy prices explains around 60% of that of the deficit since 2019. We are obviously in deficit on petroleum products, but also, and for the first time, on electricity. But this does not explain everything. We have been losing market share since 2019 in almost all manufacturing sectors, apart from food and textiles.
Even if there are elements of explanation such as the shortage of components or the lack of manpower, in particular in aeronautics or the automobile, it is difficult to know why France would be more affected than the others. country. And if we look at the indicators, there has been no significant drift in prices or costs since 2019… It is therefore difficult to find an explanation. Especially since the measures in favor of competitiveness (the CICE or the Responsibility Pact) seemed to be working: in 2017-2019, we witnessed a stabilization of market shares, which could foreshadow a recovery. But the crisis has passed by, and has called this improvement into question. The question now is whether its effects will be lasting or not.
Should we be pessimistic about the future?
If we look at the indicators, some data lead to pessimism and others to optimism. Among the most worrying elements, France is experiencing a loss of productivity that is not found among its neighbors. Once again, it is difficult to know the reasons for this. When we pick up the pieces, we can both see an effect of work-study, or the retention of labor in the aeronautics or automobile industries, but that does not explain everything.
If we choose to see the glass half full, we can say that companies in these sectors will be able to bounce back because they have kept their workforce. But there is also a risk of adjustment at this level in the coming months, in the event of a loss of industrial capacity. Another decisive element will be the way in which the loss linked to the rise in energy prices will be shared between companies and employees. If the demands for wage increases are accepted, companies will have to absorb these losses on their own at the expense of investment and future growth. But despite these worrying elements, we can also see positive signals, such as the resilience of investment, including from abroad, despite the crisis, and again in 2022. The rebound in our market share at export in 2022 compared to 2021 is also positive even if it does not erase the decline since 2019. We are in the middle of the ford, and we can still imagine favorable or much darker scenarios.
What should be done to improve French competitiveness?
French companies continue to bear some of the highest compulsory levies in the euro zone. The high cost of labor also remains high in the manufacturing sector. But we are now in a context where the debt is becoming worrying: if there is a reduction in taxes, there must be a reduction in expenditure in the face. For competitiveness, the postponement of the retirement age ticks all the boxes, even if the terms are to be discussed. This makes it possible to increase the quantity of work and therefore the wealth produced, while improving the state of our public finances, which truly constitutes a double dividend for the country.
