French Industrial Output Declines as Auto Production Shrinks
French industrial production fell in September for a second month, led by declining automobile output, as the second-largest euro-area economy slid into recession.
Output at French factories and utilities fell 0.5 percent, the Paris-based statistics office said today. That was in line with the median of 16 forecasts in a Bloomberg News survey of economists and weaker than August's 0.4 percent drop. Production by automakers dropped 3.1 percent.
“The global environment is uncertain, the financial crisis is deepening and reaching the real economy,'' said Olivier Bizimana, an economist at Credit Agricole SA in Paris.
The data is the latest to highlight the weakness of the French economy after it slipped into its first recession since 1993 in the three months through September. Finance Minister Christine Lagarde last week cut the 2009 growth forecast to between 0.2 percent and 0.3 percent in 2009.
The number of jobseekers in France rose by 41,300 in August, and by another 8,000 in September as factories in the steel and car industries laid off workers amid flagging orders.
PSA Peugeot Citroen, Europe's second-biggest carmaker, cut its full-year earnings target and said production will be slashed by 30 percent following a “collapse'' in the global market. Renault SA had a seven-day closure at its Sandouville plant in northern France because of weak sales of its Laguna mid-sized car and plans to seek 4,000 voluntary departures in its program to cut costs cash advance loans.
Some Gains
The production of some goods rose. Consumer-goods production rose 0.4 percent in the month, the statistics office said. Output of household equipment climbed 0.7 percent and agriculture and food production added 2 percent.
From a year earlier, industrial production fell 1.9 percent. Manufacturing output dropped 0.8 percent from a month earlier and lost 2.5 percent year-on-year.
The European Central Bank last week cut its benchmark interest rate by half a point for the second time in a month, lowering it to 3.25 percent, as the financial crisis curbs economic growth and damps inflation. ECB President Jean-Claude Trichet said he would not exclude further cuts.
Insee may say on Nov. 14 French gross domestic product shrank 0.1 percent in the third quarter after a contraction of 0.3 percent in the three months through June. The economy will also shrink 0.1 percent in the final three months of the year, curbing full-year growth to 0.9 percent, the slowest pace since 1993, Insee said Oct. 3.
Filed under: business by Finance Boss