Eurozone industrial output rallies sharply
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BRUSSELS, Aug 13 AFP
August 13 2013, 9:47PM
Industrial output in the 17-nation eurozone has bounced back sharply in June, another pointer that the single currency bloc is finally edging out of recession, official data shows.
With overall growth figures for the second quarter due on Wednesday expected to show a switch out of recession, eurozone industrial production in June output jumped 0.7 per cent from May when it fell 0.2 per cent.
Compared with June 2012, the eurozone gained 0.3 per cent, the Eurostat statistics agency said on Tuesday.
The figures are the latest to suggest the eurozone is turning the corner, with retail sales, business and consumer confidence and now industrial output all encouraging after months in the doldrums.
The report coincided with news from Germany, Europe's powerhouse economy, where the closely watched investor confidence index calculated by the ZEW economic institute rose by 5.7 points to 42.0 points in August.
That was the best reading since March and also beat analyst forecasts for an increase to about 40 points.
"First signs of an end to the recession in important eurozone countries may have contributed to the indicator's rise. Furthermore, the economic optimism is supported by robust domestic demand in Germany," ZEW said.
For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months.
Ben May of Capital Economics said the industrial output and ZEW figures "provide further signs that the eurozone has emerged from recession".
Second quarter eurozone overall growth should therefore come in at 0.2 per cent, reversing the 0.2 per cent contraction in the first quarter, May said.
For Howard Archer of IHS Global Insight, the industrial output figures confirmed his forecast of a return to eurozone growth in the second quarter.
However, like many analysts Archer remained cautious about the outlook.
"While encouraging, it should be noted that June's marked rise ... was substantially due to" Germany's gain of 2.5 per cent, he said.
At the same time, Archer warned of continued headwinds - a tight fiscal stance, high unemployment, lack of credit and muted global growth - which will keep the economy under pressure.
Eurostat said that for the full 27-member European Union, June output rose 0.9 per cent from May when it dropped 0.4 per cent. Compared with a year earlier, EU industrial production added 0.4 per cent.
On a monthly comparison, the biggest increases were reported in Ireland, up 8.7 per cent, followed by Romania 5.7 per cent and Poland, 3.1 per cent.
Twice bailed-out Greece gained 2.5 per cent, reinforcing growth data Monday which showed the pace of its economic downturn easing, if still very damaging.
The biggest losers in June were the Netherlands, down 4.1 per cent, with Portugal off 2.8 per cent as France, ranked second only to Germany, dropped 1.5 per cent.
On an annual comparison, Romania led the gainers, up 9.6 per cent, followed by Poland on 5.3 per cent and Estonia 4.7 per cent.
The largest loser was Finland, down 5.9 per cent.