Despite the prosperity of French agriculture, manufacturing remains the primary base of the French economy, and the chief source of export income. Manufacturing is highly diversified and extends into most regions of the country. Much of it is built on local resources and traditional skills.
Under the reigns of the Bourbon monarchs, especially Louis XIV and his financial minister, Jean Baptiste Colbert, the French developed a policy of manufacturing and trade aimed at making France preeminent among the nations of the world. France based its economic policy on producing enough to meet nearly all its own needs and selling surplus products for gold. For example, Colbert established the silk-weaving industry at Lyon so that France would not have to import this highly prized material. Ever since this period, France has been a major producer and exporter of luxury goods. These products have usually been highly profitable, but their luxury status has meant that sales decline quickly in times of world economic depression.
The Industrial Revolution, spreading from its origins in Great Britain, soon had a powerful influence on French manufacturing. The iron and steel industry, vital to any nation that sought economic power during the 19th century, became concentrated in the coalfields, particularly in northern France. There, such cities as Lens and Valenciennes grew into centers of heavy industry, and Lille, noted for textiles, was for a time the second largest city in France. Steelmaking also developed in the iron ore fields of Lorraine, where Thionville, Metz, and other centers grew rapidly. Shipbuilding flourished at several coastal sites, notably St-Nazaire, and the availability of water power encouraged the growth of small industrial towns in the Alps, Jura, Vosges, and Massif Central. Many specialized in textiles, gloves, shoes, and other consumer goods. Agricultural processing, still one of France's most important industries, developed in hundreds of widely scattered towns and villages.
The 20th century has brought the rise of new French industries, the decline of others, and the relocation of several more. Automobile manufacturing, in which France is a world leader, was at first concentrated in Paris but has spread to Brittany, the lower Seine Valley, and eastern France. Coastal sites for manufacturing have become more important in recent years, as France comes to rely more on imported resources. For this reason, oil refining is a major industry at Dunkirk, Rouen, and Fos-sur-Mer (near Marseilles); steelmaking based on imported iron ore is increasingly concentrated at Dunkirk and Fos-sur-Mer. Lorraine must struggle to stay competitive.
The French long have been leaders in technological innovation, and these skills have recently been used to develop profitable new export-oriented industries. Examples of such French expertise, which is supported by large-scale government investment, include nuclear technology; rapid transit, such as public transport systems and the TGV, a high-speed train; and aircraft design, as in the Mirage military plane and the supersonic Concorde. Similar types of new industries are located in the Rhone-Alpes region or along the Mediterranean, the French "Sunbelt."