French manufacturing output rebounded unexpectedly in May to reach the highest level since before the Covid pandemic, easing concerns of a short-term slump in the euro area’s second-largest economy.
(Bloomberg) — French manufacturing output rebounded unexpectedly in May to reach the highest level since before the Covid pandemic, easing concerns of a short-term slump in the euro area’s second-largest economy.
Production in manufacturing jumped 1.4% from April as growth continued in most sub-sectors, with a particularly sharp acceleration in automobile production, data from Insee showed. Economists surveyed by Bloomberg had expected a 0.3% decline.
A broader measure of industrial output including construction and energy also surprised with a 1.2% increase.
The figures paint a more positive picture of the French economy than recent data suggested. Last month, Insee forecast only sluggish growth for this year while a purchasing managers’ index for June indicated a contraction in the second quarter.
The surprising evidence of strength contrasts with signs of lasting manufacturing weakness in neighboring Germany. Europe’s biggest economy is due to release industrial production data on Friday that economists expect to show stagnation. A figure for Spain rose 0.4%, statistics agency INE said earlier.
Still, France’s medium-term perspectives are less buoyant. Business leaders report weak order books, while inventories are high, according to Insee.
“The outlook for industry over the next few quarters remains cloudy,” ING economist Charlotte de Montpellier said in a research note. “Weak but positive growth seems most likely.”
–With assistance from Ainhoa Goyeneche.
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