FRENCH and Italian industrial output was surprisingly strong in August, boosting prospects for third-quarter growth in the Eurozone’s second- and third-largest economies, although analysts warned that this may be masking underlying stagnation.
French output posted a 0.5 per cent monthly increase compared with forecasts of a one per cent decline, while output in Italy leapt 4.3 per cent compared with expectations of a modest 0.2 per cent increase, data showed yesterday.
German industrial output dropped one per cent on the month in August, data showed last week, but the fall was smaller than expected. Data yesterday showed German exports hit an all-time high in the same month.
The latest stats run against business surveys that have pointed to a significant slowdown in industrial activity in the Eurozone since the beginning of the third quarter.
The output data from Germany, France and Italy, which make up at least two-thirds of the Eurozone economy, suggests aggregate output figures for the 17-nation bloc may be stronger than expected when they are issued by Eurostat tomorrow.
“The numbers clearly show a different picture than the scary drop in sentiment indicators,” said ING economist Carsten Brzeski after Germany's export figures. “For the time being the current situation remains good but expectations have weakened.”
City A.M. Reporter