French, Italian output points to rebound

10th June 2016, Comments 0 comments

French industrial production rebounded in April, data showed Friday, fuelling recovery hopes in the eurozone's second-biggest economy.

Industrial output rose 1.2 percent in April, after a 0.4-percent decline the previous month, lifted mostly by gains in transport goods and heavy machinery, statistics bureau Insee said.

The figure was ahead of analysts' expectations, which had centred on a 0.4-percent increase.

"French industrial production entered the second quarter on a strong footing," commented Unicredit economist Tullia Bucco.

Manufacturing output alone also recovered, rising 1.3 percent in the month after a 1 percent downturn in March.

Production increases in the refining and coking industries slowed in April, as did output in extraction, water and energy.

"At this stage, the main risk to this positive picture is the protracted period of strikes hitting oil refineries and transport services, with a possible negative impact on overall economic activity," said Unicredit's Bucco.

The food industry stemmed its decline in output, which dropped by 0.5 percent after a 1.0-percent fall in March.

Italy, the eurozone's third-biggest economy after Germany and France, also reported rising industrial production on Friday.

Italian output rose 0.5 percent in April after showing no change in March, the Istat statistics agency said, also a better performance than analysts had expected.

Both figures support "the message from Germany that the sector had a decent month", said Jack Allen, an economist at Capital Economics.

Germany this week reported a 0.8-percent rise in industrial output, exceeding market expectations of an 0.6-percent increase.

But Allen cautioned that any future rises in industrial output in Europe's biggest economies would be slow, weighing on the outlook for gross domestic produce (GDP) in the euro currency bloc.

"Growth still looks set to slow in the second quarter and over the rest of the year, keeping the pressure on policymakers to provide further stimulus to the recovery," he said.

On the eurozone's periphery, Finland on Friday reported that its industrial production also took an upward swing in April, rising by 1.8 percent from March.

The statistics bureau of the Nordic country, which is slowly emerging from a three-year recession, said the mining and chemicals sectors were the main drivers behind the increase in output.


© 2016 AFP

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