by Calculated Risk on 5/12/2005 02:24:00 AM

The Financial Times is reporting that "France's manufacturing industry may be in recession after unexpectedly weak industrial production figures on Wednesday"

Manufacturing output tumbled by 0.3 per cent in the first three months of 2005, and by 0.9 per cent in March compared with February, according to Insee, the French statistics office. France has been one of the eurozone's best performing economies but the latest data point to a marked deterioration.

Confidence indicators suggest French manufacturing has also remained weak in the current quarter. A second successive quarterly fall would mark a technical recession in manufacturing although the strength of the rest of the economy means France is still some way from overall recession.

Meanwhile, the International Herald Tribune is reporting "Japan's index of leading economic indicators was below 50 percent in March for a second month, suggesting that the country's economic growth may stall, the Cabinet Office said Wednesday."

"The slump of the Japanese economy will continue, though the risk that it will fall back into recession is fading," said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management in Tokyo. "We can't expect corporate profits to expand this year as they did last year."

Industrial production fell 0.3 percent in March from February, the government said on April 28. Spending by households headed by a salaried worker slid 1.1 percent in the same month, the second month of decline, the government said on the same day.

The Japanese economy probably expanded at an annual 2.5 percent pace in the first quarter, according to a Bloomberg News survey.

The global imbalance story continues ...