November: +1.2% m/m, +7.4% y/y

MNI survey median: +0.5% m/m, +5.9% y/y
MNI survey range: flat to +2.0% m/m

October: +0.7% m/m (unrevised)
September: -0.7% m/m (unrevised)
August: +1.2% m/m (revised from +1.1%)
July: +0.2% m/m (revised from +0.1%)
June: -0.1% m/m (revised from -0.2%)
—

FRANKFURT (MNI) – Eurozone industrial output was stronger than
generally expected in November, rising to a two-year high as all major
components except consumer non-durable goods gained ground, Eurostat
reported on Wednesday.

On the month, industry grew 1.2%, adding to October’s rebound and
bringing overall production levels to their highest level since November
2008. Compared to November 2009, output was up 7.4%. Taking October and
November together, the two-month average was up 1.3% versus 3Q, which in
turn was 1.0% higher than the previous period.

Intermediate goods output jumped 1.6% m/m, lifting the annual
change to +7.9%, while capital goods production growth slowed to +1.4%,
for a 12.0% annual gain.

Energy goods production increased 1.5% and 4.9% on the month and
year, respectively. Durable consumer goods rose 0.1% between October and
November, though it fell 0.1% in annual terms. Non-durables output
levels were unchanged on the month, narrowing the year-over-year change
to +2.7%.

Among the larger Eurozone economies, Germany was the only country
to see a decline in November, falling 0.7% on the month for an annual
growth rate of +11.4%.

Still, the setback is no doubt merely a correction after October’s
3.1% surge rather than the start of a downward trend. Average output for
October and November was up 2.2% from the previous two months and 2.5%
higher than in the third quarter.

German manufacturing orders rose in November to the highest level
in over two years. Manufacturers polled for the December purchasing
managers index reported output and orders growing at the fastest pace
since July. The Ifo institute’s December survey showed firms’ production
plans well above pre-crisis levels.

A sharp rebound in refining activity and more moderate gains in
most other sectors lifted French industrial output 2.3% on the month,
boosting the annual gain to 5.9%.

French firms polled in December by Insee reported further increases
in production. With order book levels above historical averages for the
first time in over two years, firms were more upbeat about near-term
output, thanks mainly to brighter prospects in the auto and clothing
sectors. Noting an improvement in order books in December, the Bank of
France also predicted “an acceleration of activity in the coming
months.”

Production in Italy rebounded 1.1% between October and November to
lift overall output to a three-month high. On the year, production
increased 4.1%.

The December PMI poll signaled a pick-up in production and a
recovery in domestic orders flanked by strong demand from emerging
markets.

However, the Isae institute’s December survey showed Italian
producers slightly less optimistic about near-term production, despite
the ongoing improvement in orders and declining stocks. The weaker euro
should support Italy’s exports outside the Eurozone, which are second
only to Germany’s.

Spanish industry expanded by an additional 1.2% on the month in
November, boosting the annual figure to +2.3%.

Lifted by a brighter near-term outlook and improving production,
Spanish industrial confidence rose above its long-term average in
December to a near two-year high, the European Commission’s survey
showed.

Insee and Ifo expect Eurozone industry growth to slow to 0.6% in 4Q
and 0.3% in 1Q as foreign demand weakens, notably in Japan, emerging
Asia and Latin America.

“Moreover, the expected tightening of fiscal policy in most member
states should weigh on purchasing power and domestic demand in the euro
area,” the institutes explained in their joint outlook this week.

— Frankfurt bureau: +49 69 720 142; e-mail: frankfurt@marketnews.com —

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