The manufacturing production index unexpectedly recovered in February to a level that was not far from the peak reached in December 2017. Quite paradoxically, this growth appeared export-driven despite a context of overall trade uncertainty (car sector problems, Brexit fears). Chemicals (incl. pharmaceuticals) and transport equipment accounted for the bulk of the manufacturing production growth. It mirrored a strong start of French exports in 2019 (+EUR5.3bn y/y in the first two months). Transport equipment made +EUR1.6bn of export gains and chemicals benefited from +EUR1.5bn of additional exports. More than half of the overall export gains were realized in China (+EUR1.5bn, mainly aeronautics) and the U.S. (+EUR1.3bn, thereof +EUR0.8bn in aeronautics and +EUR0.2bn in pharmaceuticals). Export towards the UK increased by +EUR0.9bn in a visible race of inventory building by the UK before the Brexit deadline. Among the main disappointments, car suppliers suffered export losses of -EUR0.2bn, particularly towards Germany, a byproduct of German carmakers’ current difficulties.
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Weekly Export Risk Putlook 10 April 2019