Euro-Area Industrial Production Unexpectedly Gains on FrancePatrick Henry
Euro-area industrial output unexpectedly increased in April, led by France, adding to signs the currency bloc’s economy is beginning to emerge from a record-long recession.
Factory production in the 17-nation euro area rose 0.4 percent from March, when it increased a revised 0.9 percent, the European Union’s statistics office in Luxembourg said today. The median forecast in a Bloomberg News survey of 36 economists was for stagnation. Production fell 0.6 percent from April 2012.
The euro-zone economy is forecast to stagnate in the second quarter before gross domestic product returns to growth, according to a separate Bloomberg survey of economists. GDP fell 0.2 percent in the first quarter, a sixth consecutive contraction. The European Central Bank left its benchmark interest rate at a record low 0.5 percent last week.
Today’s report “lifts hopes that the sector will expand significantly in the second quarter and help the euro zone dodge a seventh successive quarter of GDP contraction,” said Howard Archer, chief U.K. and European economist at IHS Global Insight in London.
The euro was down 0.2 percent against the dollar at 12:11 p.m. in Brussels, trading at $1.3291. Europe’s benchmark Stoxx 600 index was up 0.5 percent to 293.21.
Industrial output in Germany, Europe’s largest economy, expanded 1.2 percent in April after a 1.8 percent increase a month earlier, today’s report showed. French output rebounded with 2.3 percent growth after a 0.6 percent contraction. Production in Italy and Spain decreased.
Production of capital goods rose 2.7 percent in April after a 1.2 percent gain a month earlier. Output of non-durable consumer goods was up 0.7 percent after a 0.1 percent decline. Energy production was down 1.5 percent.
Euro-area manufacturing output shrank less than initially estimated in May, though the gauge has been below 50, indicating contraction, since July 2011, London-based Markit Economists said on June 3.
“Euro-zone manufacturers are being helped by softer oil and commodity prices, which are easing pressure on their margins and giving them more scope to price competitively,” Archer said.