France: Industrial production rebounds – ING

Julien Manceaux, senior economist at ING, notes that the French industrial production rebounded by 0.3% month on month in July, starting the third quarter on a strong footing. 

Key Quotes

“Given that manufacturing dipped slightly last year, it was a pleasant surprise to see it increasing by 0.3%. This rebound was mainly due to investment goods production which recovered by 1.2% MoM after the 2.7% drop registered in June.”

“Other subsectors showed production declines, especially construction which declined by 4.2% and is now down by 1.2% on the year. After the 1.4% decline registered in 2Q19, the trend remains weak despite record-low mortgage interest rates on new residential housing.”

“Consumer goods production, which rebounded significantly in 2Q19 (+3.7% QoQ) after the “yellow vest” crisis and three weak quarters, declined by 0.8% in July. The fact that the French automobile sector is in better shape than Germany's where the impact of slowing world trade is being felt much more significantly, has undoubtedly helped industrial production in recent months. It is still well above last year's levels and seems to have recovered after the emissions saga last year in the summer.”