Euro-Area Industrial Production Increases More Than Forecast
Euro-area industrial output expanded more than economists forecast in August as the currency bloc’s recovery gained momentum.
Factory production in the 17-nation region rose 1 percent from July, the European Union’s statistics office in Luxembourg said today. That exceeded the 0.8 percent median forecast in a Bloomberg News survey of 38 economists. The decline in July was revised to 1 percent from 1.5 percent.
Encouraging indicators have begun to accumulate since the euro area returned to growth in the second quarter, ending a record-long recession. Factory output expanded for a third month in September, according to Markit Economics, and executive and consumer confidence has improved.
The euro remained higher against the dollar after the data were released. It was at $1.3554 as of 10:20 a.m. London time, up 0.1 percent from Oct. 11.
The “gradual recovery” seen by the European Central Bank has boosted equities, with the Stoxx Europe 600 Index up about 5 percent in the last three months. Europe continues to struggle with the legacy of the debt crisis now in its fourth year, including an unemployment rate of 12 percent.
ECB President Mario Draghi said on Oct. 2 that the ECB will keep key interest rates “at present or lower levels for an extended period,” based in part on the “broad-based weakness in the economy.” Economists in a separate Bloomberg survey see economic growth slowing to 0.2 percent in the third quarter after a 0.3 percent expansion in the three months through June.
From a year earlier, industrial output fell 2.1 percent in August, according to today’s report.
“The industrial production figures are unlikely to alter the ECB’s accommodative stance in the coming months as the recovery remains fragile,” Annalisa Piazza, an analyst at Newedge Group in London, said before the data were released.
Industrial output in Germany, Europe’s largest economy, rose 1.8 percent in August from July, today’s report showed. Duerr AG (DUE), which makes painting plants for the automobile industry, last month boosted its 2013 margin guidance for earnings before interest and taxes by half a point to 7.5 percent to 8 percent. Duerr, based in Bietigheim-Bissingen, sees sales growth in the second half.
In France, production increased 0.2 percent from July, Spain rose 0.1 percent and Italy fell 0.3 percent.
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