Euro-Area Industrial Output Surpasses Forecasts: Economy
Euro-area industrial output expanded more than economists forecast in February, adding to signs that the economy is beginning to emerge from a recession.
Factory production in the 17-nation economy rose 0.4 percent from January, when it dropped 0.6 percent, the European Union’s statistics office in Luxembourg said today. That is more than the 0.2 percent gain projected by economists, according to the median of 35 estimates in a Bloomberg News survey. Output fell 3.1 percent in February from the year-earlier month.
The euro-zone economy is struggling to regain momentum after five quarters of contraction. European Central Bank President Mario Draghi said last week that the ECB stands ready to cut interest rates if the economy deteriorates further and that officials are looking at “both standard and non-standard measures” to stimulate growth.
``The underlying trend in the official data is still one of a sector in decline,'' said Chris Williamson, chief economist at Markit Economics. ``However, the downturn is clearly easing: output is down just 0.2 percent in the three months to February'' compared with a 2.1 percent drop in the fourth quarter, he said.
Gross domestic product is forecast to decrease again in the first three months of 2013 before returning to growth later in the year, according to a separate Bloomberg survey of economists. Renewed market turmoil after inconclusive elections in Italy and a bailout in Cyprus may delay a recovery.
Concerns about the bailout for Cyprus helped push the euro to a four-month low against the U.S. dollar last month. Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area finance ministers, said today that “everything is in place” for the so-called Eurogroup to sign off on the details of a 10 billion-euro ($13 billion) rescue package for Cyprus at a meeting in Dublin.
The euro, which traded as low as $1.2751 on March 27, the weakest since Nov. 21, was at $1.3047 at 10:33 a.m. in London, down 0.4 percent on the day. Europe’s benchmark Stoxx 600 index declined 0.6 percent to 293.03.
Manufacturing output in the euro area fell to a three-month low in March, according to Markit Economics. Its monthly factory index declined to 46.8 last month, remaining below the 50 mark that divides contraction from expansion. The gauge has been below that level since July 2011.
Daimler AG, the world’s third-largest maker of luxury vehicles, projects higher earnings in the second half of the year, lifted by new products, even as the European market shows little sign of recovery, the Stuttgart, Germany-based company said on April 10. Daimler will update its 2013 targets when it reports first-quarter earnings later this month.
Elsewhere in Europe, London’s property market powered a seventh month of increases in U.K. house prices in March as values reached a five-year high, according to Acadametrics Ltd. The Bank of England introduced a program to boost lending last summer, and today’s report signals that access to mortgages may be improving.
Construction output in the U.K., which is not part of the euro zone, rose 5.5 percent in February from January on a non- seasonally adjusted basis, the Office for National Statistics said in a separate report. From a year earlier, construction fell 7 percent.
In the Asia-Pacific region, Singapore stuck to a policy of allowing gradual gains in its currency even after the economy unexpectedly contracted last quarter, as inflationary pressures curbed scope for monetary stimulus. India’s industrial output unexpectedly rose in February from a year earlier and New Zealand’s food prices slid for a second month in March.
In the U.S., retail sales probably stagnated in March amid the smallest employment gain in nine months, economists said before a report due later today. An index of producer prices probably decreased 0.2 percent in March after rising 0.7 percent the prior month, according to a separate survey of economists.
Industrial output in Germany, Europe’s largest economy, expanded 0.9 percent in February after a 1.1 percent decrease a month earlier, today’s report showed. France reported a gain of 0.8 percent, while Spanish output declined 1.3 percent.
Energy production increased 2.6 percent in February after a 0.1 percent drop in January, according to today’s data. Output of durable consumer goods rose 1.3 percent, while capital-goods production gained 0.9 percent.
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