French exports suddenly dropped in November, paring all the gains observed since the beginning of H2 2019. It was expected as export order books had decreased before. It followed one of the best starts in history in H1 (+EUR15bn y/y). This sudden stop can first be explained by export losses to Germany which reached about
-EUR0.6bn in November, the same as in total from January to October. Intermediate goods involved in the car supply chain are explaining the losses, with a worsening in electronics and metals. In parallel, exports to the UK decreased by -EUR0.4bn in November. Pre-Brexit stockpiling was quite strong in H1 and lower demand in the UK is starting to bite. Towards China, export gains were about +EUR2bn in H1 but should converge to zero in 2019 as a whole. Lower exports of aircrafts is the main driver. Overall, the sudden stop should continue in early 2020, before a recovery sets in that should send export gains to +EUR10bn in 2020, the lowest annual gain in four years.
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Weekly Export Risk Outlook 8 January 2020