French Industrial Output Falls Sharply

May 9, 2008
Manufacturing ouput fell 1.5%

Industrial production in France fell by 0.8% in March, official data showed on May 9 with analysts saying the figures point to deepening gloom for the economy. In February production has shown a rise of 0.3%.

Auto industry production slumped 2.9%, after falling by 2.1% in February. Consumers were turning to small cars with low fuel consumption, but these were built mostly in eastern Europe.

Manufacturing output, excluding energy, agriculture and food processing, fell by 1.5% in March.

Analysts said the data fitted a picture of darkening gloom for the French -- and to some extent eurozone -- economies, despite assurances on growth by the European Central Bank which is focusing on fighting inflation.

Production of consumer goods, the main driver of French growth in the last two years, fell by 0.8%, the output of investment goods fell by 1.1%, and production of semi-finished goods fell by 1.7%, the latest data showed.

"The French economy is in the process of going from autumn to winter," explained economist Marc Touati from Global Equities. Overall economic activity in France was likely to worsen, and growth of gross domestic product would remain weak throughout the year at an average of 1.4%, he said. "When the euroland monetary policymakers realise the extent of the damage, it will be clearly too late," Touati added, given that any easing of monetary policy can take six to nine months to affect activity.

Copyright Agence France-Presse, 2008

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