French March production up by 0.1%
Francois de Beaupuy
French industrial production rose for a second month in March, led by energy and cars, suggesting exports are helping extend a recovery in Europe's third-largest economy.
Production rose 0.1 per cent from February, when it climbed a revised 1.2 per cent, Paris-based statistics office Insee said.
Economists surveyed by Bloomberg News had expected a 0.4 per cent gain in March, according to the median of 26 forecasts. For the whole first quarter, production increased 0.3 per cent, down from 0.7 per cent growth in the fourth quarter.
"The sluggish growth in industrial production in the first quarter points to a modest performance in exports because of the euro's strength, which weighed in on the competitiveness of French companies," said Olivia de Kersauson, an economist at HSBC-CCF in Paris. "Production trends may become much more favourable in the second half."
The euro has dropped 8 per cent against the dollar since it reached US$1.2930 on February 18, the highest since its introduction in 1999. That decline has brightened the outlook for exporters, whose sales and earnings were eroded by last year's 20 per cent increase in the euro against the dollar. Confidence among French manufacturers held at a 34-month high in April.
Hermes International SCA, a 165-year-old French luxury-goods maker, said on Monday first-quarter revenue climbed 7.7 per cent, led by higher sales of handbags and watches, adding to signs that demand for luxury goods has revived. Sales, excluding the effect of exchange rates, rose 14 per cent, Hermes said.
An acceleration in global growth to 4.6 per cent this year from 3.9 per cent last year will help the dozen nations sharing the euro to expand by 1.7 per cent in 2004, up from 0.4 per cent in 2003, the International Monetary Fund predicted last month.
February's industrial production increase was revised up from a 0.8 per cent gain reported a month ago. Energy output jumped 2.9 per cent in March, and carmakers and auto-parts companies increased production 2.1 per cent.
Production of consumer goods climbed 0.4 per cent. Equipment and machinery fell 1.8 per cent, and output of components, such as computer chips and metal, dropped 0.5 per cent.
"The global economy is confirming its steady growth, which is broad-based," European Central Bank President Jean-Claude Trichet said after a meeting of Group of 10 central bank governors in Basel, Switzerland, on Monday.
First-quarter gross domestic product reports due later this week will probably confirm the IMF's prediction that France will be the best performing of the three largest economies in the euro region for the sixth time in seven years in 2004.
French GDP probably grew 0.5 per cent in the first quarter from the previous three months, according to the median forecast of 31 economists. Insee will release that report on Wednesday.
The German economy may have grown 0.3 per cent in the January-March period, little changed from the 0.2 per cent expansion mustered in the fourth quarter, according to the median forecast of 22 economists. Italy probably expanded 0.2 per cent, after growth ground to a halt in the fourth quarter, a separate survey of 30 economists showed. Those countries report GDP on Thursday.
Germany's economy will expand 1.6 per cent this year, following a 0.1 contraction in 2003, the IMF said last month. The French economy, which grew 0.5 per cent in 2003, its slowest pace in a decade, will expand 1.8 per cent this year, the IMF forecast.
(China Daily 05/12/2004 page12)