The first chart compares industrial production’s profiles in Europe. It shows the main Euro Area countries plus the United Kingdom. With the exception of Italy for which economic outlook is still problematic, we see a real recovery in Germany, in the United Kingdom and in Spain even if for this latter the level of activity is still very low. The French index is lagging and doesn’t seem to participate to the same momentum.

The 0.3% seen in April for the industrial and the manufacturing indices doesn’t change the picture. The puzzling issue is that in June 2013, the UK and French levels were the same. Now, in April, the gap is more than 3%.
Surveys on the French industrial sector do not change the outlook. The second chart shows 6 month change of the manufacturing sector index and the New Orders to Inventories ratio calculated from the Markit survey. Series’ profiles are consistent. But with the last points there is no improvement to come. We have the same picture using the INSEE survey on industry. The orders’ level is well below its historical average. There is no strong impulse on the manufacturing sector.

This puts at risk the 1% GDP growth forecast of the French government. My expectations are close to 0.6-0.7%