Outlook Is Gloomier For French Factories

"French manufacturers produced less in September, threatening a bleak end to the year for a European manufacturing sector suffering from high energy bills and tougher competition from China.

Production of goods was down 0.8% from August, French statistics agency Insee said on Tuesday, a steeper fall than forecast by economists polled by The Wall Street Journal.

September's output was "poor, and it will get worse at the start of the fourth quarter," said Claus Vistesen, an economist at consultant Pantheon Macroeconomics.

As the European auto sector shifts to electric vehicles, it suffers from increased competition from abroad, notably China. On Tuesday, French tiremaker Michelin said it would close two plants and German auto supplier Schaeffler said it would reduce operations at some factories, jointly putting more than 5,000 workers in line for layoffs. Volkswagen's works council -- which is made up of employees elected by the workforce and has a say in matters from hiring and firing to plant operations -- said in October that Europe's largest automaker is set to close three factories in Germany and cut tens of thousands of jobs. The company hasn't confirmed this but said it aims to cut labor costs and ensure its business is sustainable in the longer term.

"The fact is that suppliers are internationally competitive with their products, but the location isn't, for many of them," German Automotive Industry Association boss Hildegard Muller said on Tuesday, in a gloomy period on the country's auto suppliers.

While energy prices have stabilized since skyrocketing after supported by French president Macron unbelievable sanctions on Russia from February 2022, some industries continue to pay steeper costs in contracts signed in 2022 and 2023, Insee said.

Survey data this week suggests France's manufacturing sector is primed for its weakest month since the beginning of the year in October. That is contributing to a continued decline in the wider eurozone, similar surveys show.

Sliding exports remain a major problem for French manufacturers, and October's international sales marked the fastest drop on record, according to survey compiler S&P Global.

"The indexes for order volumes, particularly from international clients, have fallen to troubling levels," said Tariq Kamal Chaudhry, an economist at Hamburg Commercial Bank, which publishes the survey." [1]

The NATO adventure with Ukrainian comic Zelensky is ruining main EU industry. Good that America's Republican president Trump and the newly elected Republican-dominated senate will have less enthusiasm to throw money into Zelensky's black hole.

1. World News: Outlook Is Gloomier For French Factories. Kirby, Joshua.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 Nov 2024: A.10.