Industrial production fell sharply in March. Following a slightly steeper revised 1.4 percent monthly gain in February, output declined 1.1 percent. This was much sharper than the market consensus and leaves at best only a flat trend. Annual growth was minus 0.1 percent, down from 0.9 percent, and the shortfall versus the pre-pandemic level in February 2020 widened to some 5.7 percent.

Manufacturing fared no better, also contracting 1.1 percent on the month. Machinery and equipment declined 0.9 percent, food and drink 0.2 percent and other manufacturing 1.1 percent. The volatile coke and refined petroleum products category also nosedived fully 45.6 percent due to strike activity at refineries. Elsewhere, mining and quarrying, energy, water supply and waste management dropped 1.2 percent and construction 0.9 percent.

March's setback leaves total goods production last quarter unchanged versus the fourth quarter of 2022. On the same basis, manufacturing output fell 0.6 percent. Strike activity linked to pension reform was clearly an issue but underlying trends remain soft and the manufacturing PMI suggested no improvement in April. The second quarter is likely to be soft too. Today's report puts the French ECDI at 14 and the ECDI-P at exactly zero. Overall real economic activity is performing in line with market expectations.

March production is expected to slip back 0.4 percent on the month after rising 1.2 percent in February.

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 cause misleadingly large short-term swings in total industrial production.

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.