French factories enjoyed their best month in four in March but the performance was still not enough to stop the eurozone’s second largest economy falling into a disappointing growth slump at the start of the year.
Official stats from Insee revealed Fance’s industrial output climbed by 2 per cent in March compared to February after three months of declining output. The performance was better than an average forecast of 1 per cent but February’s contraction was revised lower from -1.6 per cent to -1.7 per cent.
The industrial sector as a whole contracted by 0.5 per cent in the quarter, helping push France’s GDP growth rate down to 0.3 per cent in Q1. Industry accounts for just under a fifth of the French economy.
Still, analysts expect French factories to bounce back in the middle of the year driven by a brightening world economy and improving growth prospects for the eurozone.
Yesterday, the Bank of France said it expected an acceleration in GDP growth in the second quarter to 0.5 per cent from 0.3 per cent on the back of a rebound in industrial production.
France’s growth rate disappointed at the start of the year, falling below the eurozone average ahead of its presidential election which concluded on Sunday. Unemployment has also stuck stubbornly around 10 per cent – above the bloc’s 9.5 per cent.
French manufacturing, a subsector of industry, also rebounded with a 2.5 per cent growth slump in March after slipping 0.7 per cent in February. Overall, the sector shrunk 0.3 per cent in the first quarter.
First chart via Bloomberg