France's Industrial Production Declines in September; Grim Outlook for the Last Quarter

Forex - Factories in France produced less goods in September, raising the threat of a gloomy end to the year for the country's troubled industry. According to data released by the French National Institute of Statistics and Economic Studies (INSEE), industrial production fell by 0.8% in September compared to the previous month, indicating a more negative outcome than analysts' forecast of a 0.5% decline.

In August, production had unexpectedly surged due to strong performance in key manufacturing sectors like automobiles and pharmaceuticals. However, these two sectors recorded a reversal in production in September, dragging down the overall figure.

Although energy prices have stabilized since the rapid increases caused by the Russia-Ukraine crisis in 2022, some energy-intensive industries continue to pay higher costs in contracts signed during the peak of the crisis in 2022 and 2023.

The weak performance in September is not expected to reverse at the beginning of the final quarter of the year. Data from this week's surveys indicate that French manufacturing is on track for its weakest month since the beginning of the year in October, amid dwindling order books in a tight market and a sluggish construction sector.

Meanwhile, declining exports continue to pose a significant challenge for French manufacturers. Annually, industrial production in the country has seen a decline of 0.6%.

Manufacturing output did not exhibit a different trend compared to overall production. In manufacturing, output fell by 0.8% month-on-month in October and 0.9% compared to the same month last year.