Deindustrialization: plant closures in France 2009-2011

Since January 1, 2009, theTrendeo Investment Observatory, a subscription-based public database, has recorded over 20,000 investment and divestment announcements in all sectors and regions of the French economy. This corresponds to more than 480,000 jobs created and 572,000 jobs eliminated. The following note provides more detailed information on the situation in industry, and concludes that the situation is very precarious.

Jobs in the manufacturing sector

Since 2009, the manufacturing sector has destroyed more jobs than it has created, with almost 100,000 industrial jobs lost over three years. While the French economy as a whole began to create jobs again in 2010, the manufacturing sector continues to shed jobs. However, the pace of job losses is slowing down.

2009

2010

2011

Manufacturing industry

-79 870

-14 294

-5 105

Economy as a whole

-117 338

12 665

18 294

Net balance of jobs created or eliminated in investment and divestment announcements recorded by Trendeo's Investment Observatory

Diversified manufacturing subsectors

Some subsectors continued to create jobs

The manufacturing industry encompasses a large number of sub-sectors, some of which continued to create jobs over the 2009-2011 period. The three most important of these are aerospace construction, driven by Airbus; the food industry; and the leather and footwear industries - mainly thanks to luxury leather goods. Note that the aeronautical sector is moving in the opposite direction to the improvement seen since 2009, since the annual balance of jobs created, while still positive, has fallen sharply.

2009

2010

2011

Total

Aerospace construction

1 596

1 167

462

3 225

Food industry

375

649

312

1 336

Leather and footwear industry

-551

996

779

1 224

Net balance of jobs created or eliminated in investment and divestment announcements recorded by Trendeo's Investment Observatory

Sectors that shed jobs

The automotive industry is by far the manufacturing sub-sector that has shed the most jobs over the period, with almost 30,000 jobs lost - not counting jobs in other sub-sectors involved in the automotive industry, such as plastics. Next come pharmaceuticals, electronics, IT and optics, chemicals and metallurgy.

2009

2010

2011

Total

Automotive industry

-22 825

-5 717

-798

-29 340

Pharmaceutical industry

-3 109

-1 925

-1 790

-6 824

Computer, electronic and optical equipment

-6 509

-428

340

-6 597

Chemical industry

-5 623

-361

-564

-6 548

Metallurgy

-3 950

-1 124

-1 386

-6 460

Net balance of jobs created or eliminated in investment and divestment announcements recorded by Trendeo's Investment Observatory

The decline in the number of industrial sites

Trendeo's Investment Observatory enables us to analyze deindustrialization using two criteria: the company's sector (defined by the INSEE nomenclature) and the site's type of activity (nomenclature defined by Trendeo). In this way, for announcements concerning a production site, we record the company's sector (automotive, for example) and the type of activity carried out on the site (services, R&D, industrial production, call center, point of sale...) This enables us to refine analyses of deindustrialization by identifying only jobs created or eliminated on industrial sites.

This shows that since 2009, industrial site closures have regularly outnumbered industrial site creations, although this negative balance is fortunately tending to decrease. Over the period 2009-2011, the number of industrial sites fell by 385 units. On average, plants created or, conversely, closed, employ around sixty people.

2009

2010

2011

Total

New industrial sites

139

213

142

494

Industrial site closures

397

286

196

879

Difference

-258

-73

-54

-385

Industrial site closures and creations, in number of operations recorded

Taking account of site extensions and downsizing

We account separately for investments leading to headcount extensions on existing sites and, in the opposite direction, divestments leading to headcount reductions without site closure. This gives a more complete picture of the number of sites affected by investments or divestments.

2009

2010

2011

Total

A - New industrial sites

139

213

142

494

B - Industrial site extensions

204

326

341

871

(A+B) Industrial sites benefiting from investment

343

539

483

1 365

C - Industrial site closures

397

286

196

879

D - Downsizing an industrial site

745

276

151

1 172

(C+D) Industrial sites undergoing divestment

1 142

562

347

2 051

Number of operations

The number of extensions to existing industrial sites outnumbered site creations (871 extensions over the 2009-2011 period, versus 494 site creations). Similarly, there are more sites affected by downsizing than by closures (1,172 closures for the 2009-2011 period, versus 879 sites affected by downsizing).

In a positive sign, in 2011, more industrial sites benefited from investment measures than underwent total or partial divestment.

In terms of overall industrial employment, the balance nevertheless remains negative, notably because downsizing on average affects more employees than site extensions - an average of around 50 jobs are lost when downsizing, compared with an average of around 40 jobs created when an extension is decided.

*

This note was written for the newspaper Les Echos, which published an article entitled"Désindustrialisation: nearly 900 French factories closed in three years".

The data was then picked up by numerous media outlets:

AFP / Le Monde : Nearly 900 French factories closed in three years

BFM Business: French industrialization at the heart of the presidential campaign

Reuters / Le Point: Nine hundred factories closed in France since 2009, according to a study

France Soir : Crisis: 100,000 jobs lost since 2009

L'Humanité: Loss of 100,000 industrial jobs and 900 factories in France in 3 years

Ouest France: Deindustrialization. Should we go for "Made in France"?

Boursier.com: 900 factories and 100,000 jobs lost in France in three years - who could do better?

Europe 1: 900 plants closed in three years in France

Le Figaro: France has lost nearly 900 factories in three years

Le Nouvel Observateur: 900 plants closed and 100,000 jobs lost in three years