Big fall in French factory output

The car industry saw the biggest fall in output in March

French industrial output fell four times more sharply than expected in March, increasing concerns over the state of France's economy.

Output declined by a month-on-month 0.8% in March, while analysts had predicted a fall of no more than 0.2%.

The decline was most severe in the car sector, with production slipping 2.9%, the official figures showed.

"The French economy is in the process of going from autumn to winter," said Global Equities economist Marc Touati.

All sectors hit

Manufacturing output, which excludes energy, agriculture and food processing, fell by 1.5%.

Production of consumer goods, which has driven the French economy in recent years, fell by 0.8%, as all industrial sectors posted a decline.

The poor figures will be a major headache for President Nicolas Sarkozy, who has now been in the job for one year.

They will also concern other governments across Europe, as they suggest that economies may be heading towards a recession caused by the continuing impact of last summer's global credit squeeze.