You are here

Italy's Christmas shoppers help eurozone factory output in November

ALeurozone.jpg
Eurozone factory output rose slightly more than expected in November despite stagnant production in Germany as Italy, the bloc's third largest economy, proved more resilient at the start of the Christmas shopping season.

[BRUSSELS] eurozone factory output rose slightly more than expected in November despite stagnant production in Germany as Italy, the bloc's third largest economy, proved more resilient at the start of the Christmas shopping season.

Industrial production in the 18 countries sharing the euro rose 0.2 per cent in November, following small gains in October and September, the EU's statistics office Eurostat said on Wednesday. That was better than the flat reading expected by economists in a Reuters poll.

Facing deflation and near-record unemployment, the eurozone is hoping its weak recovery picks up in 2015, but its debt crisis has badly damaged confidence and many investors say that only a U.S-style bond-buying programme will lift the economy.

The fragility of the recovery was evident in the monthly and annual November production data, with Germany, Europe's largest economy, still struggling to emerge from crisis.

Compared to the year earlier, industrial production slid 0.4 per cent, dragged down by Germany, France and Italy, which make up two-thirds of the eurozone's factory output and all fell.

On a monthly basis, only Italy of the larger economies rose in November, climbing 0.3 per cent, its best result since June.

The fall in world oil prices weighed on the index as energy production fell almost one per cent on a monthly basis. Capital goods, or machinery used to make other machinery and a sign of future demand, also fell 0.2 per cent.

But in the build-up to the busiest shopping season of the year, eurozone factories posted the highest production of durable consumer goods, such as televisions and washing machines, in more than a year. Non durable consumer goods, including food, also rose 0.5 per cent.

Fourth-quarter economic growth data for the eurozone is due on Feb. 13, but the signs are that the bloc ended the year on a weak note and eurozone consumer prices turned negative in December.

The negative inflation may push the European Central Bank to launch quantitative easing, possibly at its Jan 22 meeting.

REUTERS