Cars and drinks push up French industrial production in August

PARIS, Oct 10 (Reuters) - French industrial output rose in August, bucking forecasts of a fall, largely due to a rebound in car sector production, the statistics office INSEE said on Wednesday.

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

"This comes as a surprise after the poor performance of recent business surveys," said Dominique Barbet, an economist at BNP Paribas bank. "It is possible that manufacturers decided to increase inventories of finished goods ahead of possible industrial action from trade unions."

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

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

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

More broadly, industry output over the three months to the end of August was only 0.2 percent higher than the preceding three months and 2.0 percent lower than the same three-month period a year earlier.

Economic growth as measured by quarterly gross domestic product has been at a standstill since the end of the third quarter of 2011 and INSEE forecasts 0.2 percent GDP growth in 2012 as a whole.

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

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