Unexpected lift as EU industry beats forecasts

INDUSTRIAL production in the Eurozone rose against expectations in April, ticking up by 0.4 per cent, marking the third month in which figures for industry have risen.

There had not previously been three consecutive months of industrial growth in the euro area for over two years, and a small decline had been predicted by markets.

Though industry has now contracted by 0.6 per cent since April last year, a shrinkage as large as 1.2 per cent had been expected.

Capital goods production drove most of the increase, rising by 2.7 per cent from March, while energy and durable consumer goods declined by 1.5 and 2.7 per cent respectively.

The currency union’s industry remains volatile, having repeatedly dipped and risen since the financial crisis. Considerable variation between different countries was recorded.

While France and Germany both grew at above the EU average, the area’s embattled peripheral states continued to suffer. Portuguese, Greek, Italian and Spanish industry shrank from March.

There were also a number of inflation announcements for large European economies, all coming in below the European Central Bank’s target of just below two per cent.

Germany’s consumer price index was confirmed at 1.5 per cent for the twelve months to April, France’s at 0.9 per cent, Spain’s at 1.7 per cent, and Italy’s at 1.1 per cent. All were broadly in line with expectations.

The euro area’s industrial production, excluding construction, is now slightly above its 2010 level but remains considerably depressed from peak activity seen in 2008.

Italian, Spanish and Greek industries have been most severely damaged in the past three years, with each losing more than nine per cent of their national industrial production.

In May, after the most recent GDP figures were released, it was confirmed that the Eurozone had entered a sixth quarter of recession.