Eurozone industrial production up one per cent in August


Output in the Eurozone industrial sector rose in August after industrial production came in up one per cent, following expections of a 0.8 per cent rise, and after falling 1.5 per cent in July.

Year-on-year, production was down 2.1 per cent, after expectations of -2.4 per cent and following a fall of 1.9 per cent from July 2012 to July 2013.

Eurostat reports that in August, compared with July, production of capital goods grew by 2.4 per cent in the euro area and by 1.4 per cent in the 28 member states.

Among the countries for which data are available, industrial production increased in thirteen and fell in ten. The highest rises were in Portugal (+8.2 per cent), Malta (+7.2 per cent) and the Czech Republic (+4.7 per cent), and the largest decreases in Estonia (-3.5 per cent), Sweden (-2.8 per cent) and Latvia (-2.0 per cent).

James Howat, European economist at Capital Economics says:

Surveys such as the Manufacturing PMI suggest that industry expanded again in the following months. But even if production rose by 0.2% in September – its average monthly increase over the last six months – it would still have risen by only 0.1% over Q3 as a whole. If this is the case, industry would have made no contribution to euro-zone GDP growth, having contributed 0.1ppt to Q2’s 0.3% rise in GDP. Accordingly, although services might have made a slightly stronger contribution, it looks unlikely that the euro-zone’s recovery gathered much pace in Q3. Overall, while industrial production is recovering, the sector still seems too weak to power a decent recovery in the bloc.