By: Dr. Mike Campbell

Data just released shows that French industrial output increased by an unexpected 1.1% in the month of November. The improvement was due to performance in the refining and electronic equipment sectors. Manufacturing saw a 1.3% increase according to the French national statistics office. Taken on a year-on-year basis, French manufacturing output was up by 2.2%, but the figure is flattering because output last year was hit by strike action.

Indeed, the Bank of France has suggested that the economy failed to grow in Q4 2011, but at least it didn’t contract. INSEE, the statistics office, is responsible for producing the growth data. It found that, as a whole, the economy grew by 0.3% in Q3 2011, but they are forecasting a contraction of 0.2% in Q4 when the data is finally processed.

Should the Bank of France’s more optimistic reading of the tealeaves be correct then the nation will have come close to hitting the government’s projected full year growth figure of 1.5%. The official figures will be released in the middle of February.

Further good news for France came in the shape of a declaration from ratings agency Fitch’s which announced that it did not anticipate that it would be downgrading the nation’s coveted triple A rating in the course of 2012.

The German Side

In Germany, the official data from the Federal Statistics Office suggests that exports grew at 2.5% in November. Germany’s exports were predicted to increase by just 0.7%. The value of German exports was €94.9 billion. The balance of payments was further helped by the fact that imports fell by 0.4% month-on-month whereas they had been anticipated to rise.