French industrial output rises in December
French industrial production edged up 0.7 percent in December from November, driven by gains in the automobile sector
PARIS, February 11, 2008 - French industrial production edged up 0.7
percent in December from November, driven by gains in the automobile sector,
official figures showed Monday, but analysts warned of weakness to come if
foreign and domestic demand crumbles.
The national statistics institute INSEE said the rise in December compared
with a 1.7 percent decline in the previous month.
Manufacturing output, which excludes the energy and food sectors, rose 0.3
percent after a fall of 1.5 percent in November.
The key automobile industry showed a 3.5 percent production increase in
December following a sharp, 5.0 percent decline in November, INSEE said.
"The industrial production figure for December confirms that the French
economic climate is not disastrous but neither is it really very good,"
commented Nicolas Bouzou of the research group Asteres.
He said a rapidly widening trade deficit suggested that a fall in exports
would weigh on production.
"If demand for French products weakens, there is no reason for production
not to follow suit," Bouzou said, predicting that industrial output would rise
1.3 percent in 2008 after 1.5 percent in 2007.
At BNP Paribas bank, economist Mathieu Kaiser warned that expected slower
growth was likely to cut into industrial production in the first half.
"France is confronted with the same problems as its partners: a possible
recession in the United States, a strong euro and financial and stock market
tension that is spreading to the real economy," he said.
"The domestic market is another factor in the slowdown."
Kaiser predicted annual growth in industrial production would come to less
than 1.0 percent this year, limiting overall economic expansion to less than
Alexander Law, an economist with the market research group Xerfi, also put
the spotlight on domestic consumption.
"We think the French economy is going to suffer from anaemic internal
demand, which will lead to (economic) growth in 2008 of only 1.4 percent," he