France reports ‘alarming’ output drop

Paris / AFP

French industrial production dropped for a second straight month in June, statistics bureau Insee said Wednesday, alarming analysts who had been looking for a modest increase.
Output fell 0.8 percent in June, after dropping 0.5 percent in May, with oil refining posting the largest single decline after strikes in France’s oil industry.
Connor Campbell, an analyst at Spreadex, called the latest French reading “alarming” and “far worse” than the May drop and the 0.3 percent increase that economists had been expecting for June.
Manufacturing output alone fell 1.2 percent in June after a revised 0.1 percent increase the previous month.
“A stronger than expected fall in June industrial production ends the second quarter with another bad surprise for the French economic outlook,” said Olivier Vigna, an economist at HSBC.
“The broad-based decrease in industrial output, again fuelled by unions’ strikes, raises some questions on the strength of the French recovery,” he said.
Stoppages at French refineries in early June in protest at a new French labour law pushed output in the refining and coking sector down by a massive 12.4 percent, Insee said in a statement.
The food, transport and capital goods sectors also all saw declines.
Energy and water extraction was one of the few bright spots in the data, rising by 1.9 percent.