Eurozone industrial production continues to strengthen
Industrial production across the eurozone continued to improve in November, official data showed on Wednesday, beating consensus expectations.
According to Eurostat, the European Commission's statistics office, industrial production rose by 2.5% month-on-month in November, and by 2.3% across all member states.
That compares to October’s growth of 2.3% in the eurozone and 2.0% across the wider European Union.
Most economists had been expecting eurozone industrial production to improve by around 0.2%.
The production of capital goods was sharply higher - up 7.0% - while intermediate goods rose 1.5%. Durable consumer goods fell 1.2%, however, with non-durable consumer goods down 1.7% and energy off 3.9%.
The overall figure was also helped by an unexpected 52.8% surge in Ireland. All other countries reported far more modest gains or losses. Germany, the bloc’s largest economy, saw growth of 0.8%, but France reported a 0.9% fall and Italy reported a decline of 1.4%.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said of the spike in Irish production: "This gain was driven by a 56.7% jump in Ireland’s modern sectors’ output, effectively linked to multinationals’ use of their Irish subsidiaries for profit booking, for tax reasons. Elsewhere, the numbers were more modest."
But he added: "On the face of it, the data add to the evidence that manufacturing provided a much welcome lift to fourth-quarter economic growth in the Eurozone amid a slump in services activity. That said, we also have to factor in mean reversion in the Irish numbers, weighing on the December headline.
"Overall, we reckon that eurozone output fell by 2% in December, though this would still be enough for a punchy 3.5% quarter-on-quarter through the fourth quarter as a whole."
Bert Colijn, senior economist, Eurozone, at ING, said: "The quick recovery in demand for goods after the first wave, together with the continued recovery of export demand, has helped industry to diverge from the weak service sector performance so far.
"So the industry picture has been rather upbeat for the start of the fourth quarter, and surely helps to alleviate the GDP shock that the second wave caused.
“But the months ahead remain very uncertain as restrictions are lengthened, which could cause second round effects on manufacturing as well."
Year-on-year, industrial production in the eurozone eased 0.6% in November, though that was a significant improvement on October’s revised 3.5% contraction, and by 0.4% across the EU.