Paris, Jan. 14 (Bloomberg) -- French industrial production increased the most in more than two years in November, led by cars, suggesting Europe's third-largest economy avoided stalling in the final quarter of last year. Production climbed 1.2 percent from October, when it rose a revised 0.1 percent, the government said. Economists predicted a 0.3 percent increase. ``We're not seeing a slowdown'' at the moment, said Jean- Julien Baronnet, executive vice president of Rhodia SA, France's largest specialty chemical maker. Manufacturing, which accounts for about a fifth of France's economy, had slowed as consumers spending and exports declined. Now there are signs it's improving as a government survey showed French manufacturers' confidence reached a six-month high last month. In Germany, France's biggest trading partner, production rose the most in more than two years in November. Groupe Seb, the world's largest maker of kitchen appliances, yesterday said the French market has ``held up well'' in the fourth quarter. PSA Peugeot Citroen's 2002 global sales rose 4.3 percent as demand for Europe's second-largest automaker's cars grew in Eastern Europe and China. Production of cars and auto parts increased 2.4 percent in November, output of consumer goods such as perfumes gained 2.2 percent, components including computer chips climbed 1 percent and food production advanced 1 percent.
Outlook
At the same time, with the government reporting the number of jobseekers in France remaining at a 27-month high in November and consumer spending falling 1.7 percent the same month, some analysts say the economy may take time to accelerate. ``Growth remains weak, undermined by slowing consumer spending, the worsening of the labor market and fewer exports,'' said Philippe Waechter, who oversees investment strategy of Banque Populaire Asset Management's 56 billion euros ($59 billion) in funds. The French economy grew 1 percent last year, the least since the 1993 recession, Finance Minister Francis Mer said Sunday. Manufacturers such as phone-equipment maker Alcatel SA and smart- card maker Gemplus International SA slashed jobs and investment in 2002 because of sputtering domestic sales and exports. The government has predicted economic growth of 2.5 percent this year, a pace the country may reach once a possible conflict with Iraq is resolved, Mer said. ``Once these events are behind us, very quickly the skies will clear again,'' he said. The 12-nation euro economy, second in size only to the U.S., may shrink in the first quarter, the European Union forecast. To revive the region's growth, the European Central Bank last month cut its interest rate to 2.75 percent, the lowest in three years. ``I'm not very optimistic for the coming months in this period of weak economic growth,'' said Regis Platel, an economist at the UIMM employers' federation with members including carmaker Renault SA and Arcelor SA, the world's largest steelmaker. //www.quote.bloomberg.com