Euro Area: Industrial production rebounds in January
Industrial output expanded a seasonally-adjusted 0.8% over the previous month in January, contrasting December’s 0.1% dip which had marked the first drop in eight months. January’s increase reflected a bounce-back in the production of capital goods as well as of non-durable consumer goods. On the other hand, softer expansions were recorded in the production of durable consumer goods, energy and intermediate goods.
Looking at the individual economies for which data is available, industrial output expanded in 12 countries, while it dropped in five countries. Moreover, production increased in heavyweight France and Italy, while it contracted in Germany and Spain.
On an annual basis, industrial production inched up 0.1% in January, contrasting December’s 0.2% decrease, marking the first expansion since October 2018. Lastly, annual average variation in industrial production improved to minus 8.5% from December’s minus 8.7%.
Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:
“The outlook remains strong for the months ahead. Businesses continue to remain positive about the inflow in their order books and for production in the months ahead in general. While input problems like chip shortages and higher container prices may dampen output a bit, we don’t expect this to throw the production expansion off course significantly. We therefore expect industrial production to continue to provide an important counterweight to the services sector, which is still suffering from restrictive measures to curb the spread of the coronavirus. While we do expect GDP to contract in 1Q, manufacturing strength will likely soften the blow.”