French industrial production dropped another 1.6% in December (after a 0.9% decrease in November), its biggest monthly drop in almost two years and a definite surprise.
Workers assemble Peugeot SUVs at the PSA Peugeot Citroen assembly plant in Mulhouse, France. Industrial production in the country dropped 1.6% in December, its biggest monthly drop in almost two years.
PARIS — Industrial production in France unexpectedly tumbled again in December, according to data released Wednesday, just a day after powerhouse Germany also reported a surprise drop in output.
The industrial output for France, the second-biggest economy in Europe, dipped by 1.6% in December after slipping 0.9% the previous month, according to the national statistics agency INSEE.
The figure took analysts by surprise. Jack Allen of Capital Economics said his team had penciled in a slight rise in French industrial production for December, but the result turned out to mark the biggest monthly drop in 19 months.
“French production was much weaker than expected,” he wrote in a note to investors. “What’s more, the decline was broadbased across industrial sectors.”
Transport equipment, agriculture and food industry sectors weighed down the economy in December. Manufacturing output also fell by 0.8%, after increasing by 0.6% in November. Unusually mild weather hit electricity and gas production, while output in the auto sector decreased 3.7%, it added.
The gloomy picture was compounded by data showing a similar trend in Italy, the eurozone’s third-biggest economy. Italian industrial production also disappointed in December, with a month-on-month 0.7% contraction, its national statistics institute reported.
“December’s weak industrial production data from France and Italy showed that the sector is still struggling and adding to the risk that eurozone GDP growth slowed in Q4,” Allen said.
Capital Economics has now revised down its quarterly eurozone GDP growth forecast, he added.
Figures released Tuesday cast a shadow over the outlook for Germany, showing a surprise drop in industrial production in December, as well as a decline in exports. According to data compiled by the economy ministry, German industrial output fell by 1.2% in December, disappointing analysts’ expectations for a modest increase.
Factory output — a key yardstick for gauging the health of Europe’s biggest economy — had already declined fractionally by 0.1% in November.
Copyright Agence France-Presse, 2016