After Germany, France also reports falling industrial output

Paris: Industrial production in France, Europe`s second biggest economy, unexpectedly tumbled again in December, data showed Wednesday, a day after powerhouse Germany also reported a surprise drop in output.

France`s industrial output dipped by 1.6 percent in December after slipping 0.9 percent the previous month, the national statistics agency INSEE said. 

The figure took analysts by surprise. 

Jack Allen, of Capital Economics, said his team had pencilled in a slight rise in French industrial production for December but the result turned out to mark the biggest monthly drop in 19 months.

"French production was much weaker than expected," he wrote in a note to investors.

"What`s more, the decline was broadbased across industrial sectors," he added.

In December it was weighed down by the transport equipment, agriculture and food industry sectors. Manufacturing output also fell by 0.8 percent, after increasing by 0.6 percent in November, INSEE said in a statement.

Unusually mild weather hit electricity and gas production, while output in the auto sector decreased 3.7 percent, it added.

The gloomy picture were compounded by data showing a similar trend in the eurozone`s third-biggest economy, Italy. 

Italian industrial production also disappointed in December, with a month-on-month 0.7-percent contraction, its national statistics institute, Istat reported.

"December`s weak industrial production data from France and Italy showed that the sector is still struggling and add to the risk that eurozone GDP (gross domestic product) growth slowed in Q4 (fourth quarter)," Allen said.

Capital Economics has now revised down its quarterly eurozone GDP growth forecast, he added.

Figures released Tuesday cast a shadow over the outlook for Germany, showing a surprise drop in industrial production in December, as well as a decline in exports.

According to data compiled by the economy ministry, German industrial output fell by 1.2 percent in December, disappointing analysts` expectations for a modest increase.

Factory output -- a key yardstick for gauging the health of Europe`s biggest economy -- had already declined fractionally by 0.1 percent in November.