Euro-Area Industrial Production Increases More Than ForecastJones Hayden
Euro-area industrial production increased more than economists forecast in December, adding to signs the economy may be gaining strength after slipping into a recession last year.
Factory production in the 17-nation currency bloc rose 0.7 percent from November, when it declined a revised 0.7 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast a gain of 0.2 percent, according to the median of 41 estimates in a Bloomberg News survey. December output fell 2.4 percent from the year-earlier month.
Europe’s economy is struggling to regain momentum after the sovereign-debt crisis pushed gross domestic product into a contraction last year and drove unemployment to a record 11.7 percent. Amid signs EU leaders are making progress in tackling the fiscal turmoil, economic confidence in the euro area has risen to a seven-month high and manufacturing output contracted less than estimated in January.
Still, the European Central Bank estimates the euro-area economy will shrink 0.3 percent this year after a 0.5 percent contraction in 2012. GDP probably declined 0.4 percent in the final three months of last year after contractions in the previous two quarters, according to the median of 45 economists’ forecasts in a Bloomberg News survey. The first estimate on fourth-quarter GDP will be released tomorrow.
“Even with the increase in December, industrial production still shrank by 3.2 percent in the fourth quarter,” said Peter Vanden Houte, an economist at ING Group in Brussels. “This figure is in line with a 0.4 percent GDP contraction” in the final three months of 2012.
The euro was higher against the U.S. dollar after the data and traded at $1.3486 at 11:45 a.m. in Brussels, up 0.2 percent on the day.
Industrial output in Germany, Europe’s largest economy, rose 0.8 percent in December after a 0.3 percent drop in November, today’s report showed. Italy showed a 0.4 percent gain in the latest month, while production in France and Spain stagnated. Output in Ireland increased 8.5 percent.
Energy production fell 1.2 percent after a 1.3 percent drop in November, according to today’s report. Output of durable and non-durable consumer goods rose 2 percent, while capital-goods production increased 1.3 percent.
The November decrease in industrial output from the prior month was initially estimated at 0.3 percent.