Euro Zone Production Posts Record Rise in January

Friday, 12 Mar 2010 01:33 PM

 

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Euro zone industrial production in January recorded its biggest monthly increase on record and figures for December underwent a radical upward revision, pointing to stronger-than-expected economic recovery.

Industrial output in the 16-country currency bloc jumped 1.7 percent from December, the biggest increase since the data series began in January 1990, European Union statistics office Eurostat said on Friday.

Production rose 1.4 percent in annual terms, the first positive yearly figure since April 2008.

Analysts polled by Reuters had on average expected production in January to increase 0.7 percent on the month and fall 1.9 percent year-on-year.

Eurostat revised up the December production figures to plus 0.6 percent month-on-month and minus 4.1 percent annually from previous readings of minus 1.7 percent and minus 5.0 percent, respectively.

The data suggested that the euro zone's economic recovery from the biggest crisis since World War II may be less fragile than expected so far.

Eurostat's latest estimate showed that the zone's gross domestic product edged up 0.1 percent in the October-December period compared with the previous quarter and contracted by 2.1 percent from the last quarter of 2008.

The European Commission forecast last month that the euro zone economy would expand by 0.7 percent in 2010 after it shrank 4.0 percent last year.

In general, upbeat figures could encourage governments to wind down fiscal measures which are aimed at bolstering growth but also put severe strains on public finances.

The European Central Bank looks at such economic data to decide how quickly to withdraw special liquidity measures for banks.

It is expected to keep its main interest rate at a historic low of 1.0 percent at least until late 2010.

January production was driven by a jump in output of energy and intermediate goods, which rose 2.6 percent and 1.4 percent month-on-month respectively.

The biggest euro zone countries experienced higher production in January, led by Italy, where output rose 2.6 percent from the previous month.

Falls were registered in Spain, Portugal and Finland, where monthly production shrank 1.1 percent, 2.2 percent and 2.2 percent respectively. Ireland's output soared 15.3 percent.

© 2014 Thomson/Reuters. All rights reserved.

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