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FR: Industrial Production
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.5% | 0.4% to 1.0% | 0.5% | -0.8% | -0.5% |
| Year over Year | 2.4% | 2.1% | 1.6% |
Highlights
Industrial output increased 0.5 percent in January after a revised minus 0.5 percent (-0.8) in December and expanded 2.4 percent from January of last year. The year-on-year change is the biggest increase since the 3.4 percent recorded in September 2022.The monthly increase is in-line with the Econoday consensus forecast.
The key driver behind the increase is a 9.9 percent month-on-month gain in the production of transportation equipment, corresponding to an 11.9 percent year-on-year gain. This comes after the sector saw a 12.8 percent contraction in December compared to November.
Overall, the manufacturing sector expanded 0.6 percent month-on-month and 2.2 percent on the year. At the same time, mining and quarrying, energy, water, and waste management was flat on the month and up 1.1 percent on the year.
The result overall is a positive one, what does come with the caveat that the transportation sector is subject to large swings. Among the major industry groups, capital good output rose 2.6 percent month-on-month and 5.2 percent year-on-year in January, reflecting the contribution. However, intermediate goods, consumer durables and non-durables all recorded declines.
Other indicators have shown expectations that French companies are optimistic about the next twelve months, but order books remain weak and need to improve before that can be validated.
Market Consensus Before Announcement
Sales seen rebounding by 0.5 percent in January after dropping 0.8 percent in December.
Definition
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.
Description
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.