Further Increase In Industrial Production

In December, industrial output increased for the second month in a row (+1.1% m/m). Moreover manufacturing production was up 1.6% m/m in December after decreasing for two consecutive months. But a slight improvement seems to be taking shape. The economy may benefit from a slight improvement in global economic conditions in 2013.

In December, industrial output increased for the second month in a row (+1.1% m/m, after +0.2% m/m in November). However it was down on a year-on-year basis since April 2011(-1.9% y/y). Activity in the mining & quarrying sector (+1.2% m/m, after +8% m/m in November), and particularly crude oil production, underpinned industrial output. Indeed, extraction of oil & gas returned to more normal levels in a North Sea oil field after a long maintenance shutdown.

Manufacturing production was up 1.6% m/m in December after decreasing for two consecutive months. Activity notably fell in wood & paper & printing (-1.4% m/m) and rubber & plastic products (-1.2% m/m). Nonetheless the rise in manufacturing production was particularly boosted by an impressive increase in machinery & equipment (+8% m/m, after +3.6% m/m) and chemicals & chemical products output (+5.6% m/m).

Overall manufacturing output fell 1.3% q/q in Q4 2012 (after +0.7% q/q in Q3). Industrial production also decreased by 1.9% q/q in Q4 after already recording an increase in Q3. But a slight improvement seems to be taking shape. Moreover January manufacturing PMI headline index, despite a slight decrease, remained above the 50-threshold for the second month in a row (at 50.8, after 51.2). This suggests a slight increase in activity at the beginning of the year. Activity is still underpinned by current weakness in the eurozone and uncertainty but a slight improvement in the eurozone and in the United-States over the course of this year may progressively allow some acceleration in exports and activity.

BY Catherine STEPHAN

To Read the Entire Report Please Click on the pdf File Below.