A Small Increase In Industrial Production

In April, industrial output, up for the third month in a row, rose only by 0.1% m/m. The decrease in electricity, gas stream, air conditioning activity and in the manufacturing production weighed on activity. However the performance of manufacturing sector may be less negative in Q2 than in Q1 (-0.3% q/q).

In April, industrial output, up for the third month in a row, rose only by 0.1% m/m.

Mining and quarrying as well as water, sewerage and waste management activities, respectively up by 0.9% m/m and 1.5% m/m, underpinned industrial production. However these increases were partially offset by the decrease in electricity, gas stream and air conditioning activity (-0.2% m/m) and in manufacturing production (-0.2% m/m). The manufacture of transport equipment, other manufacturing, repair and pharmaceutical products positively contributed to manufacturing production. In contrast, the chemical sector, the manufacture of rubber and plastic products, and the food sector weighed on activity.

Production has been volatile at the beginning of the year in line with bad weather conditions but industrial activity remained very weak in comparison with the level observed at the end of 2007 (around -13%). Activity still suffers, in particular, from current weakness in the Eurozone, the UK main commercial partner.

Some Improvement
However there is a slight improvement. On year on year, the pace of decrease in industrial production slowed further (-0.6% y/y after -1.3% in March). Moreover the performance of manufacturing sector may be less negative in Q2 than in Q1 (-0.3% q/q). Indeed if the level of activity remains unchanged in May and June, then production will be up by 0.7% q/q in Q2 2013. Furthermore the prospects seem less negative in the coming months. The manufacturing PMI index for activity was up in May (to 53.8 after 51.1 in April), rising for the second consecutive month. In addition, the new orders index, one of the leading indicators of the survey, also increased further in May, up from 51.4 in April to 53.7. This suggests that manufacturing production may also record a slight increase in Q2 2013.

BY Catherine STEPHAN

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