French industrial output unexpectedly declined in December,falling 0.6% month-on-month, according to data released by the INSEE statistics agency on Friday. The drop reverses a 0.4% increase in November and signals a weakening in the French economy at the close of 2023.
The weaker-than-anticipated figures raise concerns about France’s economic growth heading into 2024, particularly as the manufacturing sector – a key driver of the nation’s economy – struggles with persistent headwinds.The decline impacts businesses across various industries, potentially leading to reduced investment and hiring, and complicates the government’s efforts to bolster economic recovery. INSEE’s data also showed a revised downward adjustment to November’s output, further highlighting the sector’s fragility.
The December decrease was driven by a 1.6% fall in durable goods production, while production of intermediate goods edged up 0.1%. Energy production saw a meaningful increase of 2.8%, but this was not enough to offset the declines in other areas. Over the fourth quarter as a whole, industrial output decreased by 0.8% compared to the previous three months.
France’s industrial sector has faced challenges including high energy costs, supply chain disruptions, and weakening global demand. The latest figures add to a growing list of economic indicators suggesting a slowdown in the Eurozone’s second-largest economy. INSEE is scheduled to release further economic data in the coming weeks,which will provide a more thorough picture of France’s economic health.
