French industrial activity likely fell in June; July inflation to have remained unchanged from flash reading

French industrial activity is expected to have dropped markedly in the month of June. According to a Societe Generale research report, the industrial production is likely to have fallen 2 percent on sequential basis in June. Delving into details, the energy output is expected to have declined 2.5 percent month-on-month. In the meantime, manufacturing output is likely to have increased a bit by 2.2 percent month-on-month in June.

“Overall, we expect industrial production to have decreased by 0.5 percent qoq in Q2 2016”, added Societe Generale.

Meanwhile, the country’s final HICP inflation for the month of July is likely to have remained the same as the flash reading of 0.4 percent year-on-year, the highest rate since November 2014, stated Societe Generale. The national CPI measure is also expected to remain unchanged from flash reading of 0.2 percent year-on-year.

According to the flash reading, food price rebounded significantly to 1.2 percent year-on-year, leading to the largest positive contribution to the headline. The energy component softened further to -3.3 percent in July from -3.1 percent in June due to renewed weakness in oil prices.

Within core components, services inflation slowed slightly to 0.8 percent year-on-year from 1 percent. The slight slowdown was partially countered by a smaller downturn in manufactured product prices, added Societe Generale.