French industrial production makes good entry in 1Q

French industrial production rose by 0.4% mom in January, coming in stronger than expected. Expectations were for a moderate monthly contraction following the strong rebound recorded in December (+1.4% mom).

The IP resilience is mainly attributable to a further strong increase in energy production (+2.6% mom vs.+2.9% in December) despite temperatures broadly in line-to-above the seasonal average for this time of the year. 

Nevertheless, manufacturing production also showed a fair degree of resilience by recording only a modest decline after the solid December rebound (-0.1% mom vs.1.1%). 

In the specific, production of  transport material displayed a firm performance (1.8% mom vs. 2.7%) fully recovering by January the strong losses recorded in November (-4.0% mom).

Unicredit notes in a report on Tuesday:

• Today's outcome makes a good entry of industrial production into the quarter, strengthening indications coming from other hard data, especially household spending, that the second quarter is so far shaping a tad more strongly than we expected.
• That said, latest indications from the Banque de France's manufacturing survey, a reliable GDP indicator, suggests that risks to our 0.2% GDP forecast for 1Q15 remain up to now balanced.