The mechanical engineering industries recorded sales of 120 billion euros in 2020, down 10.8 % on 2019 (compared with +1.7 % in 2019). Business in 2020, heavily impacted by the health crisis, should recover in 2021.
Compared with French GDP, which fell by 8.2 % in 2020, the decline recorded by the mechanical engineering industries is therefore more marked. This overall decline affects both exports (-12 %) and the domestic market (-10 %).
Variable trends by sector
The four business sectors that structure the mechanical engineering industries saw their sales fall in 2020:
- Production and mechanical equipment (- 8.5 %): with a more marked decline in handling equipment, machine tools and printing machinery.
- Integrated components and sub-assemblies (-9.7 %): with some sectors hardest hit, such as valves, gears and transmissions, and others relatively unscathed, such as pumps and compressors.
- Mechanical parts from the subcontracting sector (-19.6 %): the downturn in the automotive and aeronautical industries, the main outlets for mechanical parts, largely explains this sharp drop in activity for foundries, forges, screw machining, stamping and metal treatment and coating companies.
- Consumer goods (-7 1TP6Q): this decline mainly concerns cutlery, tools and other household items, impacted by the slowdown in world trade.
A general slowdown in exports
With direct export sales of 46.4 billion euros, the French mechanical engineering industry remains in 6th place worldwide, behind China, the United States, Japan, Germany and Italy.
The drop in its exports (-12 %) in 2020 is primarily explained by the decline in deliveries to Germany (-10.8 %), which remains by far its leading customer country with 15 % of its exports. The Brexit has also played a significant role, leading to a sharp contraction in French shipments to the UK in 2020 (-20.2 %). More broadly, exports to European Union member countries, which account for 51.5 % of French mechanical engineering exports, fell by 10.7 % in 2020.
Excluding the European Union, exports fell by 19.2 % to the United States, which will remain the second-largest customer for French mechanical engineering in 2020. Sales to Asia-Oceania fell by 5.7 %, accounting for 14.1 % of total exports in 2020. Deliveries to China, the seventh-largest customer for French mechanical engineering, will fall by 2.5 % in 2020. Finally, exports to Africa (-14.9 %), the Middle East (-14.5 %) and South America (-32.8 %) will decline significantly.
As a result, the export rate for French mechanical engineering will fall from 42.8 % in 2019 to 38.7 % in 2020, with an overall trade balance deficit of €12.3 billion in 2020. Slight decline in workforce
France's largest industrial employer (around 20 %), the mechanical engineering industry saw its workforce fall by 2.3 %, from 616,430 to 602,523. Given the economic situation, this relatively small decline can be explained by the desire of mechanical manufacturers to retain their skills until the recovery takes hold.
Outlook: signs of improvement as early as 2021
Business in the mechanical engineering industry evolved in a very negative global economic environment in 2020, marked by a sharp drop in investment by customer sectors. Hard hit in the first half of 2020 due to containment, business nevertheless began to recover in the second half of 2020, even if order book volumes were still deemed insufficient at the end of 2020.
Capital expenditure in industry (forecast +6 % in 2021) also points to a recovery in mechanical engineering activity. All customer sectors in France are expected to increase their investments in 2021, with the exception of the aeronautical sector, where productive investment is likely to remain limited.
The global economy is expected to return to growth of +6 % in volume terms in 2021. Other leverage effects include the Plan France Relance, whose positive impact on the dynamism of industrial activity is beginning to be measured.
There are still major uncertainties linked to shortages of raw materials, longer supply times and price rises, which could put the brakes on the extent of the recovery in 2021.
Overall, forecasts for 2021 point to an upturn in activity in the mechanical engineering industries, between 6 and 9 % in 2021.
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