PARIS (MktNews) - French manufacturing output failed to recover in October as most analysts expected, posting a 0.4% monthly decline after a 0.2% downturn in September, according to seasonally and workday-adjusted data released Thursday by the national statistics institute Insee. After a 0.3% fall in 3Q, disappointing October results suggest that industry will continue to drag on GDP growth in the final quarter. After a technical rebound in the first quarter, production has eroded almost steadily since April. October manufacturing output was 0.8% below the previous-year level.
All manufacturing branches posted a downturn in October except autos (+2.1%) -- still recovering from the plunge in the second half of last year. Declines were led by semi-finished goods (-0.9%) and consumer goods (-0.8%). Energy output dropped 2.8% after a 1.8% fall in September, while the food industry expanded 0.8% after +0.2%. As a result, overall industry output excluding construction was down 0.6%, both on the month and the year. Construction activity fell back 2.0% on the month and was 4.0% lower on the year.
Sector sentiment surveys suggest that industry has reached the bottom of the cycle but that output will remain soft in the near term. Insee's poll showed a modest upturn in sentiment on recent production in November after four months erosion. The PMI poll signaled the first modest expansion in output since January.
Analysts see output remaining stagnant or weak for several more months with no real upturn before the early part of next year. //marketnews.com