PARIS, May 14 - French manufacturing output rose an unexpected 0.6 percent in March as the auto and semi-finished goods sectors held strong but overall industrial production was weighed down by a fall in energy output, data showed Wednesday. National statistics body INSEE said overall industrial production excluding construction fell 0.4 percent in March in the euro zone's second largest economy, broadly in line with expectations that the looming Iraq war would knock activity. But production excluding energy, agri-food businesses and construction -- considered by INSEE the best measurement of manufacturing output -- rose 0.6 percent percent month-on-month and 0.3 percent on the year. Economists polled by had expected on average a 0.8 percent fall in overall industrial output month-on-month, with a 0.5 percent fall in the manufacturing sector. The data follow a spate of bad news elsewhere in Europe. Weighed down by uncertainty ahead of the Iraq war, German industrial output slid a greater than expected 1.1 percent in March, data showed last Friday.
"This is a relatively nice surprise, coming after strong January and February output figures," said Emmanuel Ferry at Paris-based investment house Exane, pointing to 0.9 percent rises in the auto sector and in semi-finished goods in March. "But we must remain cautious. More leading indicators are still pointing downwards and the auto sector in particular is volatile," he warned. New car registration data released earlier this month in France already hinted that the auto sector was taking a hit in April as consumers retrenched. Auto maker Renault SA saw its sales fall 13 percent in April, while PSA Peugeot Citroen suffered a 16 percent drop.//