French Factory Output Unexpectedly Grows For Second Month
France’s manufacturing output grew for a second straight month in January at the fastest pace in three months, defying expectations for a decline, preliminary data from the statistical office INSEE showed on Friday.
Manufacturing output grew 1 percent month-on-month in January, while economists were looking for a 0.2 percent fall.
December’s 1.1 percent gain was revised down to 0.4 percent. In November, output decreased 1.2 percent.
The latest growth was the fastest since a 1.1 percent gain in October.
Manufacture of machinery and equipment surged 5.9 percent and that of coke and refined petroleum products rose 4.4 percent. In contrast, manufacture of transport equipment decreased 3.2 percent.
Overall industrial production rose 1.3 percent month-on-month in January, which was much bigger an increase than the 0.1 percent gain economists had forecast.
The 0.8 percent increase originally reported for December was revised down to stagnation. In November, production shrunk 1 percent.
Industrial production grew at the fastest pace since February 2018, when it rose 1.6 percent.
On a year-on-year basis, manufacturing output grew 0.9 percent in January, marking the first increase in five months. Industrial production rose 1.7 percent, which was also the first gain in five months and the fastest since March last year.
In the three months to January, manufacturing output fell 1.1 percent year-on-year and industrial production decreased 1 percent.
The report also showed that construction output shrunk 5.4 percent monthly in January.
The outlook for the French manufacturing sector is positive, according to the latest survey data.
The Purchasing Managers’ survey from IHS Markit showed that the French manufacturing sector grew at a faster pace in February as output grew for the first time in five months.
New orders grew marginally, despite a fall in foreign demand, leading to employment gains for a second straight month.
The French economy expanded 0.3 percent quarterly in the final three months of 2018, same as in the third quarter.
The Bank of France has predicted 0.4 percent growth for the first quarter of this year as domestic demand recovers from the disruptions to activity caused by the “yellow vests” protests in the final three months of 2018.
Consumer confidence and household spending recovered in January, official data revealed.
Elsewhere on Friday, the French Customs reported that the merchandise trade deficit for January narrowed to EUR 4.195 billion from EUR 5.953 billion a year ago.
Exports decreased 1 percent after a strong 4.2 percent rebound in December. Imports grew 0.4 percent following a 1.2 percent rise in the previous month.
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