INDUSTRIAL production growth in the Eurozone declined at the start of the year despite a weaker euro and cheaper oil prices.
Industrial production dropped by 0.1 per cent in January compared with December, according to figures released yesterday by Eurostat.
Less volatile, longer-term numbers were healthier, showing 1.2 per cent growth year-on-year. Additionally, December’s monthly industrial production has been revised up to 0.3 per cent from stagnation.
The lack of momentum in Eurozone production is surprising given the steady decline in the value of the euro over the past year. This week it reached a 12-year low against the dollar.
“January’s Eurozone industrial production data suggested that industry had a poor start to 2015, with little evidence of a boost from the weaker euro or lower oil prices,” said economist Jessica Hinds from Capital Economics.
“The broader survey evidence suggests that industrial production growth is likely to remain very weak in the coming months.”
However, Hinds notes a growing service sector supports the Eurozone’s economy.
Some were more optimistic on the figures.
“Despite a set back in January, the trend in euro area industrial production is picking up. This upturn adds to the growing stream of better economic data for the region, and is likely to lead to further upward revisions to euro area growth in 2015,” said Chris Williamson, chief economist at Markit.
Of the big four Eurozone economies, France’s industrial production grew the most year-on-year – by 1.6 per cent. It was ahead of Germany’s one per cent, Italy’s 2.2 per cent drop and Spain’s 0.6 per cent growth.
The fastest growing industrial production was in Ireland. Production there expanded by 8.8 per cent year-on-year in January.