Industrial production was surprisingly weak in March. A 0.3 percent monthly fall more than unwound February's modest 0.2 percent rise and left output at its weakest level since April 2023. Annual growth still climbed from minus 0.6 percent to 0.7 percent courtesy of strongly positive base effects but production was some 5.8 percent below its pre-Covid level in February 2020.

Manufacturing was weaker still, posting a 0.5 percent monthly decline. This only dented the previous period's 1.0 percent bounce but was the second drop in the last three months. Coke and refined petroleum products (minus 4.6 percent), machinery and equipment (minus 1.1 percent) and the other manufacturing category (minus 0.8 percent) all recorded losses. Transport equipment (2.3 percent) was the only area to record a gain. Elsewhere, food and drink (minus 0.4 percent) also contracted but there were advances in both mining and quarrying, energy, water supply and waste management (0.7 percent) and construction (1.1 percent).

March's setback leaves overall goods production last quarter 0.5 percent lower than in the previous quarter and so subtracting from GDP growth. Manufacturing output was down a marginally steeper 0.6 percent and with a sector PMI of just 45.3 in April, prospects for the current quarter do not look much better. Today's report reduces the French RPI to 18 and the RPI-P to 13 but both measures remain in positive surprise territory.

March production is expected to rise 0.6 percent on the month after rising a lower-than-expected 0.2 percent in February. Production in France has been flat.

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.