French industrial production down sharply in December

Industrial activity in France fell sharply at the end of last year, with weakness widespread across all sectors.

Total industrial production contracted by 1.6% month-on-month in December, according to the country's statistics office, INSEE.

That was considerably worse than the 0.2% gain which economists had penciled in.

In year-over-year terms, industrial production fell by 0.7%.

Manufacturing output dropped by 0.8% in comparison with November, while that in the energy sector slipped by another 5.1% and in construction by 1.6%.

Factory production fell sharpest in the electronic and transport equipment segments, while regular maintenance at the country's refineries and the impact of unusually warm weather on the utilities sector kept a lid on the energy sector.

Nonetheless, Pantheon Macroeconomics described the fall in energy output as remarkable, coming as it did on the back of a 8.0% decline in the previous month.

"Assuming no revisions next month, industrial output rose 0.2% quarter-on-quarter in Q4, much less than we initially expected, and we worry the first GDP estimate of quarter-on-quarter growth at 0.2% will be revised down later this month.

"Fortunately, though, one month does not make a trend. The chart shows that the three-month average annual growth rate remains above zero, and that the new orders-to-inventory ratio indicate it will stay at about 1%-to-2% in Q1," the think-tank said in a research note sent to clients.