The industrial sector experienced a notable downturn in September, with monthly output dropping by 0.9 percent after a revised rise of 1.1 percent in August. The decline, slightly steeper than the consensus, was led by a significant fall in pharmaceutical production, which plunged 11.7 percent following high output in the prior month. Key sectors such as mining, quarrying, and energy declined, alongside machinery and equipment manufacturing, which underscored a broader industrial slowdown.

However, some sectors showed resilience. Food products, beverages, and coke/refined petroleum products rebounded, with transport equipment also showing modest gains. Yearly data paints a similar picture, with an overall industrial output decline of 0.6 percent, driven by declines in transport equipment, machinery, and energy-intensive industries. Energy costs have particularly burdened energy-intensive industries, with substantial output drops in sectors like steel, glass, and chemicals compared to pre-energy price hikes in 2021.

This trend suggests that elevated production costs continue to strain energy-dependent industries, affecting overall industrial productivity. Today's update reduces the French RPI to minus 28 and the RPI-P to minus 35, meaning that economic activity in general are falling short of market expectations.

Goods production is expected to fall 0.7 percent on the month in September, unwinding half of August's surprisingly strong gain.

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.