French industrial production grows in May; sector likely to see moderate growth in Q2

National Institute of Statistics and Economic Studies (INSEE) released France’s industrial production data on Friday for the month of April where manufacturing output grew 1.3 percent on a sequential basis. This was the highest in eight months. On a year-on-year basis, manufacturing output rose 1.6 percent y/y, near the average rate of the past year.

Rise in manufacturing output was mainly driven by a sharp increase in capital goods output. This suggests that the investment is on a slightly stronger footing.

The overall industrial production in France grew 1.2 percent on a sequential basis, underpinned by construction activity and energy production, both of which rose slightly over 0.5 percent m/m, along with manufacturing output. Looking at the May’s data, the industrial sector is expected to witness moderate growth in the second quarter.

Output in the manufacturing industry diminished in the past three months (-1.2 percent q-o-q), and to a lesser extent in the overall industry (-0.6 percent). However, on year-on-year basis, manufacturing industry’s output improved, growing 0.6 percent y/y, so did overall industrial output (+0.5 percent y-o-y).

In April 2016, output rallied in “other manufacturing” by 1.2 percent. According to INSEE,  Output bounced back in almost all branches within “other manufacturing”: strongly in other manufacturing repair and installation of machinery and equipment (+2.1 percent), and in the manufacture of textiles, wearing apparel (+5.1 percent), and more moderately in the manufacture of rubber and plastics products, and other non-metallic mineral products (+1.2 percent), in the manufacture of basic metals and fabricated metal products, except machinery and equipment (+0.6 percent), and in chemicals (+0.9 percent).

However, production slowed in mining and quarrying; energy; water supply; waste management (+0.5 percent after +3.7 percent).