Eurozone industrial output rebounds in November

January 14, 2014
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The increase was attributed to temporary factors such as a surge in energy production due to a harsh winter/AFP
The increase was attributed to temporary factors such as a surge in energy production due to a harsh winter/AFP

, BRUSSELS, Jan 14 – Eurozone industrial output rebounded sharply in November, offering some reassurance that a modest recovery remains on track after heavy falls in October, official data showed on Tuesday.

Industrial output in the then 17 nation eurozone jumped 1.8 percent in November after a fall of 0.8 percent in October, the Eurostat statistics office said.

In the full 28 member European Union, industrial production gained 1.5 percent after dropping 0.5 percent in October, it said.

In November, the biggest monthly gain was in Ireland with 11.7 percent while economic powerhouse Germany was up 2.4 percent and struggling France rose 1.4 percent.

Compared with November 2012, industrial output rose by 3.0 percent in both the eurozone and the EU.

Industrial output figures can be volatile but after a second monthly fall in a row in October, analysts had voiced concern the single currency bloc’s recovery appeared to be stalling.

The eurozone escaped a record 18-month recession in the second quarter with growth of 0.3 percent, only for this to slow to a marginal 0.1 percent in the third.

Analysts said Tuesday’s report was positive overall.

The figures “provide some hope that the economy might have regained a bit of momentum towards the end of last year,” said Jonathan Loynes of Capital Economics.

November’s was the biggest monthly gain since May 2010 while the 12 month rate of 3.0 percent was the highest for more than two years, Loynes said in a note.

“Barring a very sharp drop back in production in December, industry is now likely to make a stronger contribution to GDP growth in the fourth quarter than it did in the third,” he said.

On this basis, the fourth quarter “will probably beat the third’s 0.1 percent expansion,” he said but added that an uncertain outlook meant “it would be wrong to get carried away.”

Howard Archer at IHS Global Insight said the November figures could mean that the whole economy expanded by 0.3 percent in the fourth quarter.

Coupled with other positive indicators, the manufacturing sector will be hoping to see an increase in consumer spending and investment, Archer said.

Like Loynes, Archer was also cautious, noting that “conditions remain far from easy for eurozone manufacturers so they still have their work cut out to generate and sustain reasonable growth.”

Fiscal policy remains largely restrictive and unemployment continues near record highs, he said.

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