Month-over-month, the broader industrial sector suffered a significant setback in December 2024, reflecting a 0.4 percent contraction following a revised 0.1 percent rise the previous month. The manufacturing sector followed suit, with output declining by 0.7 percent, reversing the 0.2 percent growth observed in November. This downturn was particularly pronounced in transport equipment manufacturing, which plummeted by 5.4 percent, driven by a sharp 11.0 percent decline in motor vehicles, trailers, and semi-trailers. Pharmaceutical production also experienced a steep drop (minus 7.9 percent), suggesting potential supply chain disruptions.

Conversely, the food and beverage industry demonstrated resilience, rebounding by 2.8 percent, while mining, quarrying, and energy production increased by 1.2 percent, indicating potential shifts in industrial priorities.

Year-over-year, industrial output fell by 1.7 percent, while manufacturing output plummeted further by 1.9 percent, with transport equipment production suffering the most (minus 7.9 percent). Energy-intensive industries struggled against persistently high electricity and gas prices, with sectors like basic iron and steel manufacturing seeing a staggering 23.7 percent drop compared to pre-energy crisis levels in 2021.

These trends emphasise the vulnerability of energy-intensive sectors and the uneven recovery across industries, warranting strategic interventions to bolster industrial resilience thereby taking the RPI to minus 14 and the RPI-P to minus 10. This means that economic activities are slightly behind the market expectations of the French economy.

Output is expected flat on the month after a 0.2 percent monthly increase in November.

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.