Euro Area Industry

Industrial output drops unexpectedly in January on energy production

In January, industrial production contracted a seasonally-adjusted 0.2% over the previous month according to data released by Eurostat on 12 March. Although the contraction was slightly smaller than the 0.4% fall recorded in in December, it contrasted the 0.5% expansion the market had expected and marked the second consecutive contraction. The negative reading was driven by a 2.5% decline in energy production, which reflected mild weather conditions over the course of the month. At a country level, Latvia (-10.7% month-on-month) and Netherlands (-6.4% mom) were the region's worst performers. At the other end of the spectrum, Estonia (+4.3% mom) and Italy (+1.0% mom) recorded the best results. In the remaining three major regional economies, output expanded in Germany (+0.4% mom) and in Spain (+0.2% mom), whereas it contracted in France (-0.3% mom). On an annual basis, industrial production expanded 2.1%, which was up from the 1.2% expansion registered in December and marked the fifth consecutive positive reading. Meanwhile, annual average growth in industrial production stepped up from minus 0.7% in December to minus 0.4% in January. FocusEconomics Consensus Forecast panelists see industrial production expanding 1.8% in 2014, which is down 0.2 percentage points from last month's forecast. For 2015, panelists see industrial production growing 2.6%.

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Euro Area Industry Chart

Euro Industry January 2014

Note: Month-on-month var. of seasonally adjusted industrial production and annual average growth rate in %.
Source: Eurostat.

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