PARIS (Reuters) - French industrial production dropped unexpectedly in July, figures from the INSEE official statistics agency showed on Thursday in the latest evidence that a recovery in the euro zone's second-biggest economy is struggling to take hold.
Industrial output fell 0.8 percent from June, the weakest reading since April, the INSEE official statistics agency said.
Economists had on average pencilled in a forecast for an increase of 0.2 percent. The outcome well exceeded the most pessimistic forecast for a decline of 0.2 percent in a Reuters poll of 29 economists.
Manufacturing output, which excludes often volatile energy production, was even weaker, falling 1.0 percent, led lower by a 2.9 percent fall in car making and a 2.7 percent drop in computer, electronic and optical equipment.
"With this further fall in manufacturing output, we remain concerned by the lack of stable footing in the current recovery, which is also at odds with business confidence trends," Barclays (LONDON:BARC) economist Francois Cabau said in a research note.
French growth stalled in the second quarter, but the Bank of France estimated this week that it will have accelerated to 0.3 percent in the three months to Sept. 30 based on its monthly business sentiment survey, which showed confidence in both the manufacturing and services sector stable in August from July.
On a positive note, the economy created 23,800 jobs in the second quarter, the most in four years, according to non-farm payrolls data from INSEE also released on Thursday.
For a graphic: http://link.reuters.com/huq57s