French industrial production fell quicker than expected in March as declines in production of coke and refined petroleum products and that of electrical and electronic equipment offset an increase in the output by transport equipment.
Industrial production dropped 1.4% month-on-month in March after a revised 0.9% decline in February, the statistical office INSEE said Monday. Meanwhile, economists had forecast just a 0.5% contraction. In the first quarter, output fell 6.9% compared to the previous quarter.
Manufacturing production, which excludes food and energy, was down 1.1% in March. It follows a 0.8% decline in February, which was revised from an initial estimate of 0.1% contraction.
In March, production of coke and refined petroleum products slid 2.1% and that of electrical and electronic equipment was down 1.7%. The only sector that grew was transport equipment, which showed a 1.3% increase in output.
As the worst recession since the Second World War hit the global economy, a number of firms across the world closed their plants and sacked their employees. Firms were also forced to reduce their investment.
In a bid to address the crisis, authorities have taken various measures, which included monetary easing and increasing government spending. In France, the government unveiled an economic stimulus package worth EUR 26 billion. There was another package of EUR 6.5 billion for the country's ailing carmakers in February 2009. As a result, business and consumer morale started showing some positive signs.
However, prospects regarding the performance of the economy are still grim. The European Commission said in its spring forecast that France's economic growth is expected to be in a negative territory throughout this year and would be at close to stagnation in 2010. The Commission forecasts that the French economy will contract 3% in 2009 and by 0.2% in 2010. The International Monetary Fund also predicts a 3% contraction for 2009, but a growth of 0.4% for the next year.
Also on Monday, Italy's statistical office said industrial production fell 4.6% month-on-month in March, at the same pace it had fallen in February. Meanwhile, economists had expected a 2% fall. On an annual basis, the calendar adjusted industrial production slumped 23.8% following a revised 21.2% decline in February, while the forecast was for a 21.2% contraction.
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