Eurozone industrial output tops expectations
Saturday, October 13, 2007
EUROZONE industrial production rose much more than expected in August, the European Union's statistics office said, raising hopes of continued strong growth despite a rising euro and the global credit crunch.
Eurostat said yesterday that seasonally adjusted output in the 13 countries using the euro gained 1.2 per cent month on month for an annual increase of 4.3 per cent.
Analysts polled by Reuters had expected output to have risen 0.2 per cent month on month and 2.0 in annual terms.
Eurostat also revised up its July production data to gains of 0.7 per cent month on month and 3.9 per cent year on year, from the rises of 0.6 and 3.7 per cent initially reported.
The monthly increase in August industrial production was fuelled mainly by durable consumer goods, which soared 3.8 per cent. Non-durable goods rose 1.6 per cent.
In annual terms capital goods production rose the most, 6.6 per cent, followed by non-durable consumer goods, which increased by 5.2 per cent.
Industrial production accounts for less than a third of the euro zone's gross domestic product, which is driven mainly by the services sector.
The strong euro zone figures came as no surprise after Germany, the area's biggest economy, reported higher than expected August production of 1.7 per cent month on month and an annual gain of 5.6 per cent.
Italy, the euro zone's third-largest economy, also surprised on the upside, reporting a 1.3 per cent monthly increase and a 3.0 per cent annual rise.
The second-biggest economy, France, saw its output grow by 0.3 per cent month on month and 3.6 per cent annually. The healthy figures, notably for durable goods, could suggest that the euro zone's economy initially coped well with the strong euro, despite complaints from some politicians that the exchange rate was harming growth.
They could also indicate the real economy in the area was initially not greatly hurt by the financial turmoil resulting from the crisis in the US sub-prime mortgage sector.
The strong production figures could also be seen as an argument for the European Central Bank to increase its interest rates, although analysts believe the ECB will not raise borrowing costs for some time due to the credit turmoil.
On Thursday, some monetary policymakers said the ECB could rule out raising rates from the current 4.0 per cent to tackle inflation threats.
Euro-zone inflation rose to 2.1 per cent in September, above the ECB's price stability target.
Reuters
Eurostat said yesterday that seasonally adjusted output in the 13 countries using the euro gained 1.2 per cent month on month for an annual increase of 4.3 per cent.
Analysts polled by Reuters had expected output to have risen 0.2 per cent month on month and 2.0 in annual terms.
Eurostat also revised up its July production data to gains of 0.7 per cent month on month and 3.9 per cent year on year, from the rises of 0.6 and 3.7 per cent initially reported.
The monthly increase in August industrial production was fuelled mainly by durable consumer goods, which soared 3.8 per cent. Non-durable goods rose 1.6 per cent.
In annual terms capital goods production rose the most, 6.6 per cent, followed by non-durable consumer goods, which increased by 5.2 per cent.
Industrial production accounts for less than a third of the euro zone's gross domestic product, which is driven mainly by the services sector.
The strong euro zone figures came as no surprise after Germany, the area's biggest economy, reported higher than expected August production of 1.7 per cent month on month and an annual gain of 5.6 per cent.
Italy, the euro zone's third-largest economy, also surprised on the upside, reporting a 1.3 per cent monthly increase and a 3.0 per cent annual rise.
The second-biggest economy, France, saw its output grow by 0.3 per cent month on month and 3.6 per cent annually. The healthy figures, notably for durable goods, could suggest that the euro zone's economy initially coped well with the strong euro, despite complaints from some politicians that the exchange rate was harming growth.
They could also indicate the real economy in the area was initially not greatly hurt by the financial turmoil resulting from the crisis in the US sub-prime mortgage sector.
The strong production figures could also be seen as an argument for the European Central Bank to increase its interest rates, although analysts believe the ECB will not raise borrowing costs for some time due to the credit turmoil.
On Thursday, some monetary policymakers said the ECB could rule out raising rates from the current 4.0 per cent to tackle inflation threats.
Euro-zone inflation rose to 2.1 per cent in September, above the ECB's price stability target.
Reuters
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