France Industrial Output Falls For First Time In 3 Months

French industrial production declined for the first time in three months in January largely due to falling transport equipment manufacturing, official data showed on Friday.

Industrial production fell 1.9 percent from December, when output grew 1.5 percent, the statistical office INSEE reported.

The decline was in contrast to the expected 0.1 percent gain and also the first decrease in three months.

Likewise, manufacturing output dropped 1.8 percent, reversing a 0.2 percent rise in December.

Within manufacturing, output in transport equipment production fell 6.7 percent and that in other manufacturing slid 2.0 percent. Manufacture of food products and beverages remained flat.

By contrast, coke and refined petroleum products output grew 3.6 percent and machinery and equipment goods production rose 1.0 percent.

Output decreased by 3.0 percent in the mining and quarrying, energy and water supply group. Meanwhile, construction grew 0.2 percent.

The Purchasing Managers’ survey data, released by S&P Global on Friday, showed that France’s services industry pulled the private sector economy back into the expansion zone in February. The composite PMI climbed to 51.7 from a below 50.0 score of 49.1 in the previous month and the flash 51.6.

However, the manufacturing sector contracted in February after new orders provided a sizable drag, survey results revealed. New orders from international clients declined at the sharpest extent since May 2020.

All the data published so far suggests that the optimism at the beginning of the year was perhaps a little premature, ING Economist Charlotte de Montpellier said.

The economist said industry is currently in a strong slowdown phase, which is likely to continue over the coming months.

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