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French industrial output ends year on high, beating forecasts

Miguel Medina, AFP | The Grande Arche de la Défense, at the heart of the French capital's business district.

French industrial output rose by 0.5 percent in December from the previous month, beating forecasts, according to data from the INSEE national statistics agency.

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The growth in December industrial production was led by higher production in areas such as metallurgy, software and electronics goods, and it beat a Reuters forecast for growth of 0.1 percent.

INSEE also said that manufacturing output advanced by 0.3 percent in December.

Official data at the end of January showed that the French economy had grown 1.9 percent over 2017 - its strongest performance since 2011.

Official readings of business and consumer confidence have scaled multi-year peaks since the election of President Emmanuel Macron last May on the back of an agenda to reform the economy and help businesses.

Positives and negatives

Macron declared “France is back” in a speech at January's World Economic Forum in Davos, drumming home his message that France is open for business.

“For the first time in a long time I sense optimism both in France and from investors looking at France,” Paul Rawlinson, global president of law firm Baker McKenzie, told French daily Le Monde in Davos.

A survey by the US Chamber of Commerce and consultancy Bain & Company in November found a record 72 percent of US investors were now optimistic about the French economy, up from just 30 percent in 2016.

Lorne Baring, chief investment officer at fund management firm B Capital SA, said the broader economic backdrop still looked positive, in spite of concerns in financial markets about higher interest rates and inflation.

“Asset prices in many regions are still looking attractive and with a strong global economic background in support, they will appreciate in well diversified portfolios,” said Baring.

“Will there be another bump in the road? There has to be. In the meantime, the long-term investor should keep invested and look at the bigger picture,” he added.

(FRANCE 24 with REUTERS)

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