Bob
12th December 2013, 23:11
The fall reported by the EU’s statistics office, Eurostat, was unexpected and affected all sectors, notably energy.
The consensus in the markets was for overall output to rise by 0.3 per cent.
Though analysts cautioned that industrial output can be volatile on a monthly basis, the figures provided further evidence that the eurozone’s muted recovery has failed to gain traction in recent months.
Decreases were recorded in the eurozone’s two biggest economies—Germany and France—as well as the bailed-out economies of Greece and Portugal, and notably in Ireland, which saw output slump 11.6 per cent.
“This recovery is very, very modest,” said Bill Adams, senior international economist for PNC Financial Services Group.
October’s fall follows a 0.2 per cent drop in September and means that the sector could be a drag on the fourth quarter.
For an economy that only grew by a quarterly rate of 0.1 per cent in the third quarter, that’s a concern.
The poor figures could pile further pressure on the European Central Bank (ECB) to do more to shore up the eurozone’s recovery, especially at a time when inflation is way below target.
Though it has little room to cut its benchmark interest rate following last month’s reduction to a record low of 0.25 per cent, the ECB has other potential tools at its disposal.
In a report released the same day as the Eurostat figures, ratings agency Standard & Poor’s said the eurozone recovery will likely be “slow and uneven” and requires the support of the ECB.
It predicts that the eurozone economy will contract 0.6 per cent this year and expand by just 0.9 per cent next year.
Ref
http://epp.eurostat.ec.europa.eu/portal/page/portal/publications/collections/sif_dif
The consensus in the markets was for overall output to rise by 0.3 per cent.
Though analysts cautioned that industrial output can be volatile on a monthly basis, the figures provided further evidence that the eurozone’s muted recovery has failed to gain traction in recent months.
Decreases were recorded in the eurozone’s two biggest economies—Germany and France—as well as the bailed-out economies of Greece and Portugal, and notably in Ireland, which saw output slump 11.6 per cent.
“This recovery is very, very modest,” said Bill Adams, senior international economist for PNC Financial Services Group.
October’s fall follows a 0.2 per cent drop in September and means that the sector could be a drag on the fourth quarter.
For an economy that only grew by a quarterly rate of 0.1 per cent in the third quarter, that’s a concern.
The poor figures could pile further pressure on the European Central Bank (ECB) to do more to shore up the eurozone’s recovery, especially at a time when inflation is way below target.
Though it has little room to cut its benchmark interest rate following last month’s reduction to a record low of 0.25 per cent, the ECB has other potential tools at its disposal.
In a report released the same day as the Eurostat figures, ratings agency Standard & Poor’s said the eurozone recovery will likely be “slow and uneven” and requires the support of the ECB.
It predicts that the eurozone economy will contract 0.6 per cent this year and expand by just 0.9 per cent next year.
Ref
http://epp.eurostat.ec.europa.eu/portal/page/portal/publications/collections/sif_dif