French and Italian output drops

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France and Italy both saw sharp falls in industrial output in March, which were much larger than forecast.

French output was down 1.4% on the previous month, said national statistics office INSEE. Economists had predicted a decline of only 0.5%.

Production of electronic goods and output in the energy and food sectors fell, outweighing a rise in transport.

Meanwhile monthly production in Italy fell for the 11th month in a row, down 4.6% on February's output.

Analysts had expected a monthly drop of 1.6%.

'Bad news'

Italy's heaviest falls came in the production of electrical and domestic equipment, which declined 10.6%, Italian national statistics agency ISTAT said.

"The [Italian] figures are strongly negative," said Maurizio Binelli from Abaxbank.

"On one hand, they reflect the weakness in global demand, and thus Italian exports.

"From this point of view, they are in line with the data from France.

"But there are other reasons for the weakness. In Italy, there was bad news even for non-durable goods, which reflects domestic demand."

Other data released on Monday showed industrial production in Slovakia was 18% lower in March than in the same period a year ago.

Car plants saw output fall 30.3% as a result of low demand in the global downturn, the Slovak Statistics Office said.