French industrial output, boosted by auto production, rallied strongly in May after months of retreat, official data showed on Friday. Overall industrial output rose by 2.6 percent, having contracted by 1.5 percent in April, the statistics agency INSEE reported. Manufactured output surged by 2.4 percent after eight months of decline and a drop of 0.6 percent in April. An official close to Economy Minister Christine Lagarde, who asked not to be named, commented: 'A low point has been reached in the industrial sector. The industrial climate is stabilising.' At consultants Xerfi, economist Alexander Law said: 'This had to happen eventually.' He said: 'Production had fallen so far that it could only pick up.' Industrial output over the last three months shows a fall of more than 16.0 percent from the equivalent figure last year. The rally in May was driven mainly by an increase of production of goods for the transportation sector, and most notably in the auto sector where it rose by 10.2 percent. Economists said that this was in response to a government subsidy for the scrapping of an old car if it were replaced with a new one, a measure which has stimulated the sale of small cars. 