France July Industrial Production Preview

Consensus: +4.8% m/m; -8.4% y/y; Prev (Jun): +12.7% m/m, -11.7% y/y

• M/M IP is expected to rise again in Jul, although at a slower pace than in Jun with markets looking for an uptick to 4.8%.
• Production rebounded sharply as the country came out of lockdown, however IP remains 11% below Feb's pre-covid level in Jun and mfg output is 12.4% smaller in Jun than in Feb.
• French output rose 12.7% in Jun following May's strong increase of 19.9%, while y/y production continued to record a negative reading of -23.4% in June.
• Survey evidence suggests that the recovery is lost momentum as the growth rate of output is decelerating.
• The mfg PMI fell back to contraction territory in Aug as output growth cooled significantly and firms continued to reduce their workforce.
• On the other hand, Insee's business climate in the mfg sector improved further and gained 11pt in Aug, however the indicator remains below Feb's level.