By William Horobin, PARIS– French industrial production rose more than expected in August, helped by a strong rise in manufacturing output in the automobile sector,.
Industrial production in the eurozone’s second largest economy rose 1.6% in August from July, national statistics agency Insee said. Economists polled by The Wall Street Journal had forecast a 0.5% rise in August.
French companies are benefiting from a payroll tax credit scheme designed to improve their competitiveness. It helped bring down corporate tax by 37 percent in January to August compared with the same period last year, according to monthly budget data on Friday.
Despite China’s slowdown and the rut other big emerging market economies are in, France’s Socialist government expects the economy to grow at least 1.0 percent this year, which would be the strongest performance since 2011.
The stronger than expected recovery in industrial output shows France’s economy gathered some momentum at the end of the summer after showing weakness in the spring and early summer.
The output of manufactured goods was particularly strong, rising 2.2% on the month. Production in the automobile sector surged 6.5%.
Still, Insee revised the July industrial output number to -1.1% from -0.8%, indicating the weakness earlier this year may have been deeper than initially thought.
Statistics have already shown the French economy stagnated in the second quarter after recording strong growth in the first three months of the year. The French government expects steady growth for the rest of the year, and has not altered its forecast of 1% gross domestic product expansion in 2015.