Weak factory data fuels fear of recession

Tim Wallace
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EVERY major EU economy except Germany’s saw industrial production fall in the year to January, official figures showed yesterday.

The data reflects output from factories, as well as other industrial activities such as mining.

Output fell 1.2 per cent in the 12-month period in the Eurozone and one per cent in the EU as a whole – the second consecutive fall after the 1.8 per cent and one per cent drops respectively in the year to December, Eurostat revealed.

Germany’s industrial production increased 1.6 per cent, while French output dropped 2.2 per cent, Spain’s 4.2 per cent, the UK’s 4.4 per cent and Italy’s five per cent.

Energy output in the Eurozone dropped 6.2 per cent, consumer durables by 2.2 per cent and intermediate goods by 1.3 per cent, although capital goods output rose 3.1 per cent.

However, there were some signs of stabilisation in the monthly data.

Both the Eurozone and EU saw a 0.2 per cent rise in output in January compared with December, with growth of 1.5 per cent in Germany and 0.4 per cent in France, although Italian, Spanish and UK output fell 2.5 per cent, 0.2 per cent and 0.4 per cent respectively. “These figures do not provide much comfort and point to a reasonably high chance that the wider Eurozone economy entered a technical recession in the first quarter,” warned Capital Economics’ Ben May.