Robust euro zone industrial output boosts second quarter quarter growth hopes

Thursday 12 June 2014 18.37
Industrial output in the 18 country euro zone rose 0.8% on the month in April
Industrial output in the 18 country euro zone rose 0.8% on the month in April

Euro zone industrial output rebounded with a twice as strong as expected monthly rise in April thanks to energy and non-durable goods production, pointing to an acceleration of economic growth in the second quarter.

Output in the 18 country euro zone rose 0.8% on the month in April after a downwardly revised -0.4% drop in March. Economists had expected a 0.4% rise. 

Compared with the same time of 2013, production grew by a much stronger than expected 1.4 % compared to an upwardly revised 0.2% rise in March, previously reported as a 0.1% drop. Economists had expected 0.9% annual growth.

The data follows strong euro zone retail sales numbers and a rebound in German industrial orders in April.

The monthly production rise - the strongest in five months - was mainly driven by a 2.5% rise in energy output, followed by a 2.1% increase in non-durable consumer goods output. 

Production of capital goods was the only sector showing a monthly decline, with a 0.1% drop.

Industrial production in Portugal, which exited an international bailout in May and saw strong investor appetite for its bonds this week, reported production rising by a record 6.7% on the month in April. 

Spain had monthly production rising at its fastest pace since August 2012 and Ireland's industry recorded its strongest annual rise in April since November 2010, according to Eurostat.

Finland and Malta were the only two euro zone countries with production falling on the month in April, while the bloc's second and third largest economies - France and Italy, returned to monthly expansion in April.

Output in Germany, the euro zone's growth engine, edged up by a smaller than expected 0.2% on the month as the spring rebound turned out weaker than usual due to a mild winter, German economy ministry data showed. 

Outside the euro zone, Britain enjoyed its strongest annual growth in over three years in April, showing that the country's economic expansion was becoming less reliant on consumer demand and the recovery was broadening. 

The €9.5 trillion euro zone economy surprised with weaker than expected growth at the beginning of this year as strong growth in Germany was not enough to offset contractions in the Netherlands, Italy and stagnating French economy.