Why this is important to Wisconsin businesses: As the industrial production sector modernizes, domestic suppliers are unable to keep up.
France is the sixth-largest economy in the world, and with a GDP of $2.5 billion in 2016, represents around one-fifth of the Euro zone’s GDP. Alongside Germany, France is among the most important industrialized countries in Europe. With a 1.3 percent GDP growth forecast for 2017, the French economy is expected to stay stable at the level of the previous year. The manufacturing sector in France, at 19.4 percent, represents the second-highest share of GDP. Growth of the industrial production sector by 1 percent, and of the machinery market by 2 percent, in 2016 and positive forecasts for 2017 are boosting projections of demand for new machinery and replacement parts. However, France cannot fully cover its machinery needs for the domestic market and export purposes, with machinery and transportation equipment being the leading export product categories. Hence, industrial machinery and parts are also France’s top import categories. One of the most important suppliers is the U.S. with a 15.4 percent share of machinery imports.
Despite the fact that industrial production showed only minimal growth in 2016, the European Commission expects French equipment investments to grow faster than GDP, by 4.2 percent in 2017, and by 5.1 percent in 2018. This is due to the ongoing modernization of production techniques and machinery to keep up with automation, new technologies, higher energy efficiency and stricter security and environmental standards. To tackle these needs, France needs to import.
In its 2015 yearly analysis, the French association for machinery and manufacturing engineering, Symop, predicted high demand for toolmaking machinery in the coming years. Due to favorable financing options from the government, the French association of mechanical industries, FIM, expects an increase in demand for different machinery subsectors, especially toolmaking, textiles, food processing, and hydraulic and pneumatic machinery in the next years. The reason for these projections is that FIM recorded a growth in sales of 11.7 percent in machinery tools in the first few months of 2016 compared to the same period a year prior.
In 2016, the U.S. exported goods worth $30 billion to France. Wisconsin contributed $436 million of these exports. Machinery exports from Wisconsin (especially metalworking, tool making, construction and industrial machinery) posted an increase from 2015 to 2016, ending at $68 million in 2016 and representing the third-largest export sector for Wisconsin.
Wisconsin companies can take advantage of these favorable conditions in the French machinery sector and use France as a gateway to enter the EU. For more information on doing business with France, please visit the website Business France.
