January: +0.3% m/m, +6.6% y/y

MNI survey median: +0.5% m/m, +6.4% y/y
MNI survey range: flat to +3.1% m/m

December: +0.3% m/m (revised from -0.1%)
November: +1.5% m/m (revised from +1.4%)
October: +0.8% m/m (unrevised)
September: -0.6% m/m (revised from -0.7%)
August: +1.2% m/m (unrevised)
—

PARIS (MNI) – Eurozone industry production expanded somewhat less
than generally expected in January, but December’s result was revised
upward to show a further rise after robust growth in October and
November, Eurostat reported on Monday.

January’s 0.3% gain left output 6.6% higher on the year and 1.0%
above the 4Q average, which was up 1.9% from 3Q. Industry has recovered
over half the ground lost during the recession, remaining roughly 12%
below pre-crisis levels.

Leading indictors point to solid growth in the near term.
February’s manufacturing PMI signaled the fastest expansion in over a
decade (59.0), led by Germany, Austria and the Netherlands. Growth in
Eurozone output (61.4) and new orders (59.8) was close to record highs.

The European Commission’s survey also flagged a further improvement
in manufacturers’ assessment of new orders and their expectations for
output in the coming months.

Eurozone energy output fell 3.1% in January after
exceptionally cold weather in December, largely offsetting a promising
2.5% rebound for semi-finished goods. Capital goods output dipped 0.3%
after three months of dynamic expansion. Consumer durables bounced back
2.5% on the month, while slipped non-durables slipped another 0.4%.

Annual comparisons confirm the comeback in investment goods
(+12.3%) and semi-finished goods (+10.1%), far outpacing the recovery
for consumer durables (+3.8%) and non-durables (+0.3%).

German industry posted a 0.1% rise in January, leaving output 11.1%
higher on the year. National data showed that a drop in energy and
especially capital goods output offset strong gains for semi-finished
and consumer goods. Construction activity, which will be covered by
Eurostat’s release this Thursday, also rebounded sharply, more than
retracing the plunge in December.

German manufacturing orders recovered 2.9% in January, giving a
modest 0.4% rise for December-January compared to the previous two-month
period. Producers polled by Ifo last month said current business
conditions had improved further, with the sentiment index close to
pre-crisis highs, while prospects at the six-month horizon remained very
promising.

In France, output rose 1.1% on the month, giving a 5.3% increase on
the year. Stronger gains in manufacturing were partly offset by a marked
downturn in energy after the December cold wave. As in Germany,
construction recovered fully from the previous drop.

Sector surveys by the Bank of France and Insee suggest that the
recent dynamism in industry could wane somewhat in coming months, due
mainly to the slowdown expected in the auto industry. Still, the
February factory PMI (55.7) signaled strong output gains and sustained
growth new orders, especially from abroad.

Industrial production in Italy fell back 1.5% in January and was
only 0.6% higher on the year. Modest gains for capital goods were
largely offset by declines for semi-finished and consumer goods and
particularly energy.

Italy’s factory PMI jumped to 59.0 in February, the highest level
in nearly 11 years, boosted by record growth in output and new orders.
However, Istat’s sector survey signaled a slight erosion in output
expectations, led by capital goods, along with weaker prospects for
orders and for the economy as a whole.

In Spain, production bounced back 1.4% on the month for a 3.8% rise
on the year. The PMI poll pointed to stronger output gains in February
(54.3) and a further acceleration in orders (54.1). The Commission’s
survey also signaled rising new orders and brighter output expectations
for the near term.

Among the smaller reporting countries, monthly results were quite
mixed, with gains in Estonia (+4.2%), Malta (+6.0%) and Slovakia (+0.9%)
and declines in Ireland (-1.0%), Finland (-2.8%) and Portugal (-4.2%).

Annual gains were strongest in Estonia (+28.8%), Slovakia (+17.1%)
and Finland (+6.5%), while Portugal posted a decline (-1.4%). No data
were provided for Greece, where production in December was sharply lower
on the year (-5.2%).

–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com

[TOPICS: M$XDS$,MT$$$$,M$X$$$]