Eurozone industrial production shrank in October
Factory output in the 19-country currency union contracted for the second consecutive month, sliding 0.5 per cent
Industrial production in the eurozone shrunk in October, the EU’s statistics office Eurostat said, as expansion in France’s output failed to offset a deepening downturn in other countries, such as Germany.
Factory output in the 19-country currency union slid 0.5 per cent from the previous month, while the September expansion was revised downward to a 0.1 per cent contraction, according to Eurostat.
Compared with September, production of capital goods in October fell 2 per cent and energy by 0.7 per cent, while production of durable and non-durable consumer goods rose by 1.9 per cent and 0.4 per cent respectively.
The 0.5 per cent expansion in France’s output, which reflects its factories’ specialisation in consumer goods, was not enough to offset the declines in other eurozone countries.
Industrial production in Germany, the eurozone’s largest manufacturing producer, fell 1.7 per cent in October compared to the previous month.
The continued weakness in the eurozone industrial sector reflects the effect of the ongoing trade conflicts and the uncertainties surrounding Brexit, which have slowed down world trade growth.
After the disappointing German industrial production data, analysts had braced themselves for lacklustre data for the whole eurozone, Peter Vanden Houte, chief economist at ING, said in a note.
“The main culprit was the 1.6 per cent month-on-month fall in capital goods production, a direct consequence of the hesitant business investments in the wake of global uncertainty,” Vanden Houte said.
“The fourth quarter started on a weak footing and that this weakness could linger on a bit longer as the main uncertainties could still take some time to dissipate,” he added.
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