EU industrial production splutters in December
December’s weak Eurozone production figures, released this morning, show the area’s still struggling to keep a firm grip on recovery.
Consensus was for a 0.3 per cent fall in industrial production, but the last month of 2013 actually saw a drop of 0.7 per cent in the euro area and EU28.
Growth remained over the fourth quarter as a whole, though, with production rising by 0.3 per cent, following the third quarter’s stagnation.
Germany, France, Italy and Spain all saw contraction in December. Having said that, the measure can be volatile, and November’s strong gains meant some pull-back always seemed likely.
Eurostat
Capital Economics thinks the sector may have added about 0.1 percentage points to GDP growth in the final quarter, suggesting growth in the economy as a whole probably beat the third quarter’s 0.1 per cent expansion. The research group expects a 0.2 per cent gain. (Numbers are out Friday)
It warned, however, that it'd err on the side of caution when it comes to hoping for a boom in industry. Although PMI data suggests that production picked up at the beginning of 2014, the backdrop “remains fairly weak”, with the euro dragging the sector down for a time to come.
When it comes to prompting action from the European Central Bank, Howard Archer of IHS Global Insight says the results will keep pressure on the bank to up stimulus at its March meeting – although, he adds, it’ll be more focused on inflation developments and money market interest rates.