Economic Sectors, Manufacturing
France is the world's fourth largest industrial producer, after the United States, Japan, and Germany. Manufacturing in France is highly diversified and serves as the nation's primary source of export income. Leading manufacturing sectors include food products; automobiles, aircraft, ships, and trains; electrical machinery; mechanical equipment and machine tools; metallurgy; chemicals and pharmaceuticals; and textiles and clothing.
During the 17th century the French state promoted mercantilism—manufacturing and trade policies designed to develop the economy and swell the national treasury with gold bullion. These policies, established before the age of industrialization, included state support for high-quality manufactured goods—silk, tapestries, ironwork, porcelain, and other luxury items. France earned a world reputation for producing luxury goods.
The Industrial Revolution, which originated in Britain in the 18th century, influenced industrialization in France. By the 19th century iron and steel manufacturing, shipbuilding, and textiles had become important industries. Industrial cities, including Lille, Lyon, and Mulhouse, grew rapidly. Despite these changes, France remained overwhelmingly an agricultural nation of small towns and villages at the end of the 19th century. Industrialization in France was gradual, prolonged, and steady, rather than swift and spectacular.
Before World War II, France's manufacturing sector consisted mostly of small, family-owned firms, many of which were geared to produce low volumes of finely crafted goods. Manufacturing grew dramatically after the war and was the major force behind France's postwar economic recovery. By the mid-20th century manufacturing had emerged as the most important sector of the French economy. France became a leading producer of automobiles, steel, electrical equipment, and chemicals and earned a reputation for technological innovation.
During the 1960s the French government encouraged mergers among many domestic manufacturing firms to promote efficiency and to enhance the sector's international competitiveness. This policy helped create a number of large enterprises that dominated their industries domestically. By the mid-1970s, however, manufacturing output and employment began to decline as chronic recession took hold, foreign competition intensified, and the economy shifted toward service-based industries.
Today, food processing is France's largest manufacturing sector in terms of employment. In 1998 food and beverages accounted for 16 percent of all manufacturing employment. France is the world's largest producer of sugar beets; the second largest producer of wine, behind Italy; and the second largest producer of cheese, behind the United States. Other well-known French foods include meats, breads, and confectionaries.
France ranks fourth in the world in automobile production and second in the European Union (EU), behind Germany. The two major auto-manufacturing firms are Renault and Peugeot, which acquired automaker Citroen in 1974. The French automobile industry was once located mainly in the Paris metropolitan region, but there are now major facilities in Alsace and Lorraine in the northeast and in the western Paris Basin.
French firms are internationally known for technological innovation in aerospace, defense, transportation, and other specialized industries. French passenger trains and railroad equipment are sold domestically and abroad, and the French-made TGV (train a grande vitesse) is the world's fastest train. France produces advanced commercial and military aircraft, as well as many kinds of military hardware. France is also a world leader in nuclear energy technology. A large electronics industry in France produces telecommunications equipment, computers, televisions, radios, and other items. French mechanical equipment and machine tools are sold throughout the world.
The manufacture of iron and steel remains an important source of employment in France, although producers are increasingly turning to imported iron ore. France is also home to a large aluminum industry. The French chemical industry produces a diverse range of products, including industrial chemicals, plastics, fertilizers, solvents, beauty products, and pharmaceuticals. The textile and apparel industries, long famous for cotton, silk, and woolen goods, remain important. However, production has declined dramatically since World War II due to intensified foreign competition.