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April 12, 2013 1:06 pm
Eurozone industrial output edged higher in February thanks to a jump in energy production, official data showed on Friday.
The 0.4 per cent month-on-month rise beat economists’ forecasts and followed a 0.6 per cent fall in January. Compared to February a year ago, however, production was 3.1 per cent lower, the data from Eurostat, the EU’s statistical office, showed.
The European Central Bank signalled after its last interest rate-setting meeting that it might cut rates if the region’s economy continued to deteriorate. Friday’s data does little to change the overall picture, especially given monthly volatility in the numbers and frequent revisions, though it could represent a hint of stabilisation.
Ben May, economist at Capital Economics, said in a note the data probably did not yet show the negative effects of the appreciation of the euro. “[There is] little here to suggest that a sustained economic revival is on the cards,” he said.
The economy of the 17 euro-area countries is expected to remain in recession in the first quarter of the year, which would represent the sixth successive quarterly contraction.
The Eurostat data showed a jump of 2.6 per cent in energy production in February, but production of intermediate goods – which captures a lot of intra-eurozone exports into Germany to make finished goods for export elsewhere – fell by 0.1 per cent.
The country-by-country breakdown of industrial production showed that both Germany and France managed monthly increases in output, while there were significant falls in Italy, Spain and Greece. All five countries also recorded big year-on-year falls.
With weak domestic demand and many companies, especially in Germany, dependent on exports to the rest of the world, the eurozone countries remain reliant on a pickup in global growth, economists say.
The eurozone data followed a similarly muted rise in India’s industrial production in the same month. Output rose 0.6 per cent from a year earlier – not fast enough to convince analysts that Asia’s third-largest economy was exiting its downturn. The increase was also due to volatile capital goods.
Separate data showed that lower demand for exports hurt Singapore’s economy in the first quarter, which contracted a seasonally adjusted 0.6 per cent from the fourth quarter, or 1.4 per cent on an annualised basis. However, the island state’s monetary authority did not loosen its monetary policy on the back of the disappointing data, saying it current stance was appropriate in the face of existing inflationary pressures.
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