Industrial production edges up in EU as recession recedes
By Pan Pylas |
November 13, 2009, Friday
|
Print Edition
Print Edition
INDUSTRIAL production in the 16 euro zone countries increased a modest 0.3 percent in September from the month before, reinforcing expectations that growth figures later today will show that recession is over.
The increase reported yesterday by the EU's statistical office Eurostat was slightly below market expectations for a 0.5 percent increase but means that industrial production over the July to September quarter rose by 2.2 percent.
Though September's increase was way down on the 1.2 percent recorded in August, partly because of the end of some of the car scrapping subsidies across the region, it was the fifth straight monthly rise. That helped trim the annual rate of decline to 12.9 percent from 15.1 percent.
Industrial production is important for the euro zone as much of its future growth will hinge on exporting high value items like cars, particularly from Germany.
The September industrial figures will be incorporated into growth data due today.
Recovery cautious
These are expected to show that the euro zone as a whole is officially out of recession.
Markets expect the euro zone to have grown around 0.5 percent in the third quarter from the previous three-month period, even though some countries, such as Spain, remain in recession. Figures earlier showed Spain contracted a further 0.3 percent in the July-September quarter.
Ben May, European economist at Capital Economics, said the industrial production data over the last three months was enough to boost gross domestic product in the euro zone by 0.7 percent.
"Encouragingly, business surveys suggest that the recovery looks set to continue but given the strong euro and continued weakness of exports there are good reasons to remain cautious about the strength of the revival," he said.
"For now, though, these figures confirm that tomorrow's Q3 GDP release will show that the euro zone economy expanded at healthy clip," added May.
For the wider 27-country EU, industrial production rose by a more modest 0.2 percent on a monthly basis.
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