French industrial production likely to have declined in May

France’s industrial output is likely to have declined in May after recovering in April. Given the industrial action in May, some of April’s improvement is expected to have reversed. According to a Societe Generale research report, French industrial production is expected to have dropped 0.3 percent on sequential basis and 0.8 percent on year-on-year basis. The shutdown of refineries probably indicates that energy production is likely to be hit. It is expected to have declined two percent month-on-month.

This is likely to more than counter the projected rise in manufacturing output and pull down industrial production as a whole. However, with a constant profile, industrial production of France is still likely to be on the path of a rise of 0.5 percent quarter-on-quarter in the second quarter of 2016, according to Societe Generale.

Meanwhile, the Bank of France business confidence indicator is likely to remain stable at 97 in June, lower than its long-term average of 100, added Societe Generale. The PMIs, in recent times have appeared quite weaker. But the French PMIs are giving false signals of a considerable slowdown of the economy.