Euro zone industrial output returns to strong growth in January

Brussels (Reuters): Euro zone industrial production grew sharply and by more than expected in January, driven in particular by increased output of capital goods, such as equipment and machinery, the European Union statistics office said on Monday.

Industrial production in the 19-member single currency zone was 2.1% higher in January than in December, Eurostat said, and grew by 2.8% year-on-year.

The data were significantly higher than expectations and followed two months of declines. Economists polled by Reuters had forecasts a 1.7% month-on-month increase, and an output rise of only 1.4% on a yearly basis.

Eurostat also revised up the December figures, which now showed a monthly output fall of only 0.5% instead of the 1.0% decrease estimated earlier. Year-on-year, the figure was revised up sharply to a decline of 0.1% from a previous estimate of a 1.3% drop.

Output growth in January was driven mostly by capital goods, an indicator of future industrial investments, which saw a 3.9% monthly rise. Production increased 2.4% for both energy and non-durable consumer goods. Output of durable consumer goods, such as fridges or cars, went up 1.3%.

All major economies of the euro zone expanded production in January, compared to the previous month, reversing a two-month negative trend in the euro zone.

In Germany, the bloc’s largest economy, industrial output rose 2.9% in January on a monthly basis. In France production grew 1.4%, and in Italy output by 1.9%.

Buckling the trend, Spain, the fourth biggest economy of the euro zone, experienced a 0.2% industrial output decrease on a monthly basis.

An employee of German car manufacturer Mercedes Benz observes the connection between the bodywork and the chassis of an A class (A-Klasse) model at their production line at the factory in Rastatt, Germany, 22 January