Cars and drinks push up French industrial production in August

PARIS, Oct 10 (Reuters) - French industrial output rose inAugust, bucking forecasts of a fall, largely due to a rebound incar sector production, the statistics office INSEE said onWednesday.

Total industry output rose 1.5 percent versus July, and theJuly figure itself was revised to a rise of 0.6 percent ratherthan the initially reported 0.2 percent increase.

"This comes as a surprise after the poor performance ofrecent business surveys," said Dominique Barbet, an economist atBNP Paribas bank. "It is possible that manufacturers decided toincrease inventories of finished goods ahead of possibleindustrial action from trade unions."

One of the main causes of the overall rise was an increaseof 9.9 percent in auto sector output. Another driver was therise in output of food oils and in beverage production during amonth when high summer temperatures boosted demand for drinks.

Economists polled by Reuters in advance of the report had onaverage predicted drop in August of 0.2 percent.

One statistics office official cautioned against reading toomuch into an August output figure because it is peak month inthe summer holiday season and many factories are closed or onlimited production, meaning small increases in one area oranother can have a large impact on the overall reading.

More broadly, industry output over the three months to theend of August was only 0.2 percent higher than the precedingthree months and 2.0 percent lower than the same three-monthperiod a year earlier.

Economic growth as measured by quarterly gross domesticproduct has been at a standstill since the end of the thirdquarter of 2011 and INSEE forecasts 0.2 percent GDP growth in2012 as a whole.

(Reporting By Brian Love. Editing by Jeremy Gaunt.)

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Keywords: FRANCE ECONOMY/INDUSTRY