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Chart 3: French Manufacturing Output
Business Confidence (INSEE)
Industrial Output (Index 2005=100)
Industrial Output (% y/y, RHS)
-2.5
-5.0
-7.5
-10.0
-12.5
-15.0
-17.5
-20.0
01 02 03 04 05 06 07 08 09 10
Source: Reuters EcoWin Pro
% sa - wda Mar (f) Feb Jan 10 Mar 09
Total m/m 0.3 0.0 1.1 -1.5
Total y/y 5.2 3.3 2.6 -16.1
Manufacturing m/m 0.2 0.4 0.6 -1.2
Manufacturing y/y 6.1 4.6 3.6 -18.0
Key Point:
Production should resume its upward trend after a
pause in February. But it remains way below the precrisis
level.
5.0
2.5
0.0
BNP Paribas Forecast: Slowly Recovering
France: Industrial Production (March)
Release Date: Monday 10 May
Industrial output should continue to recover on a trend
basis. Business surveys are improving after a correction in
February that was accompanied by a pause in IP growth.
This pause may have affected output the following month.
On the demand side, conditions are not highly supportive.
In absolute terms, orders remain at a low level. Signs of
investment recovery are lacking, although the worst is
clearly over. Export increases remain moderate. More
importantly, retail sales were lacklustre throughout the first
quarter.
The rebound in new car registrations in France in March
and ongoing increase of sales in Europe (except Germany)
should be supportive for the auto industry. Cold weather
should help support March electricity output.
Our forecast is conservative with a modest increase
manufacturing output, +0.2% m/m. Nevertheless, the
comparison with severely depleted production in the same
period last year should push the y/y gain to c.6%.
This would result in a 0.7% q/q increase in manufacturing
output and a 1.3% q/q jump in total industrial production in
Q1.
Chart 4: Norwegian CPI Electricity (% m/m)
Source: Reuters EcoWin Pro
Apr (f) Mar Feb Jan
CPI % m/m -0.3 0.5 1.3 0.2
CPI-ATE % m/m 0.4 0.2 0.7 -0.6
CPI % y/y 2.8 3.4 3.0 2.5
CPI-ATE % y/y 1.7 1.7 1.9 2.3
Key Point:
Given the fall in electricity prices, headline inflation
should moderate in April.
BNP Paribas Forecast: Headline to Moderate
Norway: CPI (April)
Release Date: Monday 10 May
In March, both headline and CPI-ATE inflation at 3.4% and
1.7% y/y respectively were slightly lower than market
expectations. Electricity prices were once again the main
driver for the increase in the headline rate of inflation, while
core, CPI-ATE, inflation reached its lowest level since
November 2007.
In April, we expect headline inflation to moderate from
3.4% y/y to 2.8%. Given electricity prices lag developments
in Nordpool electicity prices by a month, the fall in the latter
by around 25% m/m in March points to a fall in electricity
inflation in April (Chart 2). Overall, we expect housing and
utilities inflation to add 1.7pp to headline inflation, after a
contribution of 2.2pp in March. In terms of other
components, a further increase in oil prices in NOK terms
over the month points to an increase in fuel inflation.
Overall, transport inflation should add 0.7pp to inflation,
broadly the same contribution as in March.
CPI-ATE inflation should remain broadly stable, at 1.7%
y/y. We expect it to trend lower in the coming months given
the impact of the stronger currency and some spare
capacity in the economy. However, this moderation is
unlikely to be as marked as in some other advanced
economies.
Market Economics 7 May 2010
Market Mover
72
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