February: +0.4% m/m, +7.3% y/y

MNI survey median: +0.8% m/m, +7.9% y/y
MNI survey range: +0.4% to +1.1% m/m

January: +0.2% m/m (revised from +0.3%)
December: +0.2% m/m (revised from +0.3%)
November: +1.5% m/m (unrevised)
October: +0.8% m/m (unrevised)
September: -0.7% m/m (revised from -0.6%)
—

FRANKFURT (MNI) – Industrial output in the Eurozone expanded less
than expected in February, while gains in the previous two months were
revised downwards, Eurostat reported on Wednesday.

On the month, production was only 0.4% higher in February, matching
the most pessimistic forecasts and resulting in an annual increase of
7.3%.

Taking into account the prior months’ revisions, average output in
over January and February was still up 1.0% compared to 4Q, which in was
1.9% higher than in 3Q.

After a strong rebound in January, intermediate goods production
growth slowed to 0.5% in February, resulting in a modest slowdown in
annual growth to 10.1%. Conversely, capital goods recovered in February
after a brief downturn, rising 0.6% on the month and 13.8% on the year.

Durable consumer goods output slowed to a monthly growth rate of
0.4% for a 4.3% annual rise. Non-durables rebounded 0.9% on the month,
resulting in an annual rise of 2.5%.

Energy production continued to lose ground, falling an additional
0.6% on the month for a 3.3% decline on the year.

The March factory PMI showed output (58.5) cooling slightly from
February’s near-record pace, led by Germany, Austria and the
Netherlands. Only Greece sustained a decline.

The latest joint forecasts by France’s Insee, Italy’s Istat and
Germany’s Ifo institutes point to a further deceleration in Eurozone
industrial output growth to 0.7% in 2Q and 3Q.

“The expected softening in world trade momentum – in particular
because more restrictive economic policies in China are likely to curb
activity there – high energy prices and financial uncertainties might
start to soften entrepreneurs’ prospects,” the institutes explained.

Among the larger Eurozone states, German industry continued to flex
its muscles in February, gaining an additional 1.4% on the month to give
an annual increase of 13.4%.

Industry is likely to remain the backbone of the German economic
recovery for some time to come. The March manufacturing PMI signaled
ongoing robust growth in production and new business.

In France, output slowed to a growth rate of 0.4%, though
accelerated on the year to 6.0%.

As in Germany, prospects for French industry appear bright. A
recent Insee survey showed that total and foreign orders improved
significantly in March. The Bank of France’s survey pointed to a
“moderate” pace of growth in the coming months.

Italian industrial production registered a notable recovery in
February, rising 1.4% to retrace nearly all of January’s loss and
boosting the annual gain to 2.3%.

Istat reported little change Italian firms’ overall view of new
orders in March, with the deterioration in foreign demand offset by a
more positive view of domestic new orders.

In Spain, output growth slowed to a modest 0.3% on the month,
though was enough to strengthen the annual rise to +3.6%.

At 51.6 in March, the Spanish factory PMI indicated a further
expansion in industry. New orders also increased (51.0), though at a
slower pace than in February, resulting in a reduction in outstanding
work.

Outside of the big four economies, the strongest monthly rise was
noted in Slovenia and Portugal (both +1.7%), followed by Finland
(+0.9%). On the other side of the spectrum, Malta (-5.8%) led the way in
losses, followed by Ireland (-2.5%), the Netherlands (-1.6%) and
Slovakia (-1.3%).

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

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