January's French industrial data support the message from the German and Spanish releases that activity was expanding slowly at the start of the year.
But the fall in Italian production suggests that the three-year recession there has continued.
The 0.4% monthly rise in French production was better than the consensus forecast and our own expectation that production would drop back after December's sharp rise. The increase pushed the annual growth rate up to a 14-month high of +0.6%.
January's increase was due to a sharp rise in the volatile energy component while manufacturing output fell by 0.1%. This implies that total production might fall back in February.
Italian data for January were far less encouraging. Industrial production fell by 0.7% following a modest 0.4% monthly rise in December.
The outturn was worse than the consensus expectation of a 0.5% rise and meant that production fell by 2.2% compared to a year earlier.
Capital Economics notes in a report on Tuesday:
- If industrial production were to stagnate in February and March, it would have declined by 0.3% in Q1 after a 0.1% fall in Q4.
- This suggests that the Italian economy will fail to expand for the fourteenth quarter running.
