French August Industrial Output Unexpectedly Stalls

Oct. 11 (Bloomberg) -- French industrial production unexpectedly stalled in August, suggesting a recovery in the euro region’s second-largest economy is losing momentum.

The increase in output in July was revised lower to 0.8 percent from the 0.9 percent originally reported, Paris-based national statistics office Insee said today. Economists had forecast a 0.3 percent increase in August, according to the median of 13 estimates in a Bloomberg News survey. Output climbed 3.2 percent from a year earlier.

French companies may rein in spending as a stronger euro makes their goods less competitive abroad just as the global recovery weakens. In the euro-region economy, manufacturing growth weakened for a second month in September. The European Commission said last month that the French economy will lose momentum in the second half of the year.

“The entire euro region will expand at a weaker pace in the second half than in the previous six months,” said Sebastian Wanke, an economist at Dekabank in Frankfurt. “The French situation is still relatively robust. We’ll see weaker growth rates, but it’s more of a normalization.”

The lack of growth in French industrial production contrasted with neighboring Italy, where output jumped 1.6 percent from July, the biggest increase since January, the national statistics office said in a report today. German production rose 1.7 percent in August from the previous month, a report last week showed.

French manufacturing output, which excludes utilities and mining, remained unchanged from July, when it rose 1.2 percent, today’s report showed.

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