EU industrial output falls sharply in Oct
Paris, December 12, 2013
Euro zone industrial output fell at its steepest monthly rate in more than a year in October, highlighting the fragility of the bloc's economic recovery and supporting the case for further central bank stimulus.
The 9.5 trillion euro ($13.1 trillion) regional economy emerged from recession in the second quarter but growth almost ground to a halt again in the third, and the outlook is clouded by record high unemployment, and weak consumer and business confidence.
Industrial production in the 17 countries using the single currency dropped 1.1 per cent on the month, its biggest monthly decline since September 2012, Thursday's data from EU statistics agency Eurostat showed.
Analysts polled last week by Reuters had expected a 0.3 per cent rise after a revised 0.2 per cent drop in September. Data showing a 1.2 per cent drop in industrial output in the region's dominant economy Germany was released on Monday.
"All in all, today's industrial production figures clearly highlight the bumpy and fragile nature of the euro zone's economic recovery," said Martin van Vliet, an economist at ING.
"With euro zone growth seemingly stuck in low gear disinflationary pressures will persist, thereby keeping the possibility of further ECB action very much alive."
The European Central Bank cut interest rates to a record low of 0.25 per cent in November in reaction a sharp fall in inflation and the weak recovery, with the bank saying it stood ready for further action to shield the rebound and keep inflation on projected path.
A spokeswoman for the EU executive, the European Commission, said a variety of indicators needed to be taken into account when assessing the state of the economy, which it remained confident was at "(the) beginning of a solid recovery".
Year on year, output rose 0.2 per cent in October.
The monthly production fall was led by a 4 per cent drop in highly volatile energy output, followed by a 2.4 per cent decline in production of durable goods including cars and electronics. Capital goods production fell 1.3 per cent.
European refinery output in October dropped 6 per cent on the year and was down by 7.9 per cent on the month as refiners traditionally conduct routine maintenance in the third quarter, and weak profit margins pushed many to cut crude processing rates for economic reasons this year as well.
Output in the euro zone's second biggest economy France dropped by 0.3 per cent on the month for a second consecutive month.
Ireland, which is exiting an international financial bailout, saw production plummet 11.6 per cent on the month, the worst performance since September last year.-Reuters