French import growth is persistently outstripping exports.

Exports ground to a halt in July as imports rose by 0.7%. Over three months, six months and twelve months, export growth is lagging import growth. Both flows however are showing accelerating and quite solid growth overall. Still there are exceptions. On the export side both capital goods and motor vehicle flows have come up lame over the past three months. Only a surge in consumer goods exports compensated for the weakness. For imports all major types of flows are still accelerating. France’s erratic reading in July for exports does dove tail with the previously reported weakness in German export orders in July. We are still trying to assess what the prospect for growth is in the face of such uneven results. On the other hand the strength in French imports seems to be a powerful sign that French domestic demand is still strong and that its domestic sources of growth are underpinned.