Euro zone industrial output shows surprise rise in April

Wed Jun 12, 2013 6:25am EDT
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By Martin Santa

BRUSSELS (Reuters) - Industrial output from euro zone factories defied market expectations of a month-on-month decline and rose in April, data showed on Wednesday, but the pace of expansion was slowed by a drop in production of energy and durable consumer goods.

Industrial production in the 17 countries using the single currency rose by 0.4 percent on the month, after a nearly two-year high jump of 0.9 percent in March, the data from the EU statistics agency Eurostat showed.

Economists polled by Reuters had expected a 0.2 percent fall.

The bloc's economy remains crippled by the impact of the sovereign debt crisis as governments continue growth-slowing fiscal consolidation, millions of Europeans are out of jobs and small- and medium-sized companies are struggling to get credit.

"While April industrial production data are relatively encouraging, the euro zone manufacturing sector is not yet out of the woods," said Howard Archer, chief European economist at IHS Global Insight.

"Indeed, conditions remain far from easy for euro zone manufacturers."

The pace of the bloc's economic contraction slowed in the three months to March, compared to the previous quarter, but Europeans facing stressed labor markets remain reluctant to spend, preventing a more dynamic rebound.

The European Central Bank (ECB) still expects a gradual recovery later in the year, but sees downside risks.   Continued...

Employees work on the production line for the Rolls Royce Ghost at the Rolls Royce Motor Cars factory at Goodwood near Chichester in southern England April 24, 2013. REUTERS/Luke MacGregor