French industrial output experienced a decline in several critical sectors in July over the month of June, thereby reverting the progress achieved in June. The aggregate industrial output experienced a 0.5 percent decline, while manufacturing output experienced a 0.9 percent decline following a 0.9 percent rise in June. Transport equipment manufacturing experienced the most severe declines, with a 4.9 percent drop, primarily due to a substantial decrease in motor vehicle production which fell by 4.6 percent and other transport equipment which fell by 5.1 percent. Following a substantial 12.8 percent increase in June, the overall downturn was also influenced by a remarkable 9.9 percent decline in coke and refined petroleum products.

The other manufacturing industries sector experienced a 0.6 percent decline, while the food and beverage sector continued to decline by 0.3 percent. Nevertheless, there were some encouraging developments: machinery and equipment manufacturing experienced a 2.0 percent rise, while output in mining, quarrying, energy, and water supply increased by 1.8 percent.

Year-over-year, the situation remains grim. Manufacturing output decreased by 3.0 percent between May and July, compared to the previous year. Motor vehicle manufacturing experienced a severe 17.8 percent decline, while the transport equipment sector experienced a 7.1 percent decline. Despite this, the energy sector experienced a 1.1 percent growth and other transport equipment experienced a modest 0.8 percent growth, providing some stability amid the broader industrial struggles.

Production is seen down 0.3 percent on the month after an unexpected large 0.8 percent bounce in June.

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.