By Mark Deen: French industrial production fell
in January as Europe’s second-largest economy teetered on the
brink of its third recession in four years.
Output from factories, mines, utilities and the construction industry fell 1.2 percent in the month from December, national statistics office Insee said in an e-mailed statement. Economists had expected a 0.2 percent drop, according to the median of 25 estimates gathered by Bloomberg News.
The drop underlines the slowdown in the French economy at
the start of the year. Since then, factory managers have
reported improved orders as global demand recovers even as
President Francois Hollande’s budget cuts crimp domestic
spending.
“Business surveys suggest a contraction in January,” said Pierre-Olivier Beffy, chief economist at Exane BNP Paribas in London. “The rebound in export orders gives a ray of hope for the spring.”
France slipped back into recession in the first half of last year for the first time since the first quarter of 2009. After shrinking 0.2 percent in the final quarter of 2012, gross domestic product will shrink 0.1 percent in the current quarter before returning to growth in the three months through June, according to the median forecast of 13 gathered by Bloomberg.
Sentiment among manufacturing executives climbed for a third month in February, the Bank of France said last week. The central bank’s services index, which is more closely correlated with domestic demand, fell.
Economists including JP Morgan’s David Mackie attribute the discrepancy to France’s struggle to keep shrinking its budget deficit. The government is seeking 5 billion euros ($6.5 billion) in fresh spending cuts this year, Prime Minister Jean- Marc Ayrault said March. 8. Source
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Output from factories, mines, utilities and the construction industry fell 1.2 percent in the month from December, national statistics office Insee said in an e-mailed statement. Economists had expected a 0.2 percent drop, according to the median of 25 estimates gathered by Bloomberg News.
The drop underlines the slowdown in the French economy at
the start of the year. Since then, factory managers have
reported improved orders as global demand recovers even as
President Francois Hollande’s budget cuts crimp domestic
spending. “Business surveys suggest a contraction in January,” said Pierre-Olivier Beffy, chief economist at Exane BNP Paribas in London. “The rebound in export orders gives a ray of hope for the spring.”
France slipped back into recession in the first half of last year for the first time since the first quarter of 2009. After shrinking 0.2 percent in the final quarter of 2012, gross domestic product will shrink 0.1 percent in the current quarter before returning to growth in the three months through June, according to the median forecast of 13 gathered by Bloomberg.
Sentiment among manufacturing executives climbed for a third month in February, the Bank of France said last week. The central bank’s services index, which is more closely correlated with domestic demand, fell.
Economists including JP Morgan’s David Mackie attribute the discrepancy to France’s struggle to keep shrinking its budget deficit. The government is seeking 5 billion euros ($6.5 billion) in fresh spending cuts this year, Prime Minister Jean- Marc Ayrault said March. 8. Source
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