French industrial output slumped by 1.4 percent in March on a monthly basis, after dropping 0.9 percent in February, the state statistics agency said on Monday. Within the overall figure, manufactured output fell by 1.1 percent on a monthly basis, according to the agency (INSEE).
Previous estimates for February's figure had put the drop at only 0.5 percent, and INSEE's latest update reflects an increasingly gloomy outlook among statisticians for the prospects of an early return to growth. Output from France's agricultural and food production sector dropped 0.6 percent in March, and the only major area of the economy to see growth was pharmaceuticals, where production grew by 2.4 percent.
Last week the European Commission warned that the 27-nation EU economy would contract by four percent this year as a worse-than-expected recession drives unemployment to levels not seen since World War II. France is not the worst hit of the continent's economies, but President Nicolas Sarkozy's government expects gross national product to shrink by at least 2.5 percent in 2009 and some experts are more pessimistic. "These results suggest that industrial activity continued to contract at the end of the first quarter at a relatively rapid pace, although slightly more moderate than during the last months of 2008," said analyst Frederique Cerisier of BNP Paribas bank.
"The recession is going to continue, but it will probably be less severe in the coming months." Alexander Law at the economic consultancy Xerfi said: "What we see in the rear-view mirror should start to be less shocking over the coming months because a technical recovery is virtually inevitable" due to reduced stocks. But he added: "It is impossible at this point to say how long that will last."