|Month over Month||0.2%||-0.3%||-0.8%||-0.7%|
|Year over Year||-2.6%||-1.0%||-0.9%|
French goods production (ex-construction) laboured in November. A surprise 0.3 percent monthly fall followed a marginally shallower revised 0.7 percent decline in October to leave output 2.6 percent lower on the year, its worst performance since May.
The first back-to-back drop in production since December/January was attributable to sharp reversals in refining (5.7 percent), transport equipment (minus 3.4 percent) and food and agriculture (minus 1.6 percent). The other manufactured goods category also dipped 0.1 percent to leave manufacturing output 0.6 percent down on October when it contracted 0.1 percent. The only areas of strength were electronics and machinery (0.7 percent) and the more volatile construction (1.1 percent) and energy and extracted goods (1.2 percent) subsectors.
The October and November setbacks leave average industrial production so far last quarter 0.9 percent below its third quarter mean. Accordingly, without a sizeable bounce at year-end the goods producing sector is set to subtract from real GDP growth last quarter. The economy expanded at a quarterly 0.3 percent rate in the July-September period but looks to have slowed, possibly significantly, since then.
Industrial production measures the physical output of the nation's factories, mines and utilities. Manufacturing is seen as the best guide to underlying developments as some sectors can be very volatile and have a misleading impact on the total industrial production reading.
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios. Like the PPI and the orders data, construction is excluded from the data. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
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