Cars driving a drop in output at French firms

City A.M. Reporter
FRENCH industrial output slid 1.2 per cent in January, dragged down by weak car and agri-food production but also by a change in the base year used for the data.

It was the latest gloomy news for France’s economy, which is struggling to avoid recession.

The 1.2 per cent monthly drop, the sharpest fall since September, was much worse than a forecast for a flat reading. It was affected by the change in the base year used by the INSEE statistics office and by a new weighting of the indices.

Car making dropped by 13.5 per cent in January, following a revised 8.8 per cent increase in December.

Analysts said the drop in overall output was nevertheless a further sign that France’s economy could slip into recession after contracting 0.3 per cent in the final quarter of 2012.