Euro area industrial production picks up in October, points to solid Q4

Industrial output in the single currency bloc rebounded in October for a solid start to the fourth quarter.

According to Eurostat, total production, excluding construction, grew at a month-on-month pace of 1.1% following a 0.2% dip in the month before.

Economists had penciled-in a rise of 1.2%

Production of capital goods was strongest, bouncing back by 3.0%, alongside a 1.7% increase in that of durable consumer goods.

From among the euro area's largest economies, output grew the most Germany (3.0%) and France (0.9%), while registering declines in Italy, the Netherlands and Spain.

In annual terms, total industrial production was ahead by 3.3% (consensus: 3.2%).

"Looking ahead, we think that the sector will support the economy this quarter despite the fact that lingering supply constraints and the ongoing energy crunch will keep a lid on output and that the return of the virus risks exacerbating supply bottlenecks," said Claus Vistesen, euro area chief economist at Pantheon Macroeconomics.

"Our forecasts for the four major economies—which imply a decent quarter from France and Germany but falling output in Italy and Spain—suggest that EZ industrial production will grow by 1.0-to-1.5% this quarter, offsetting some of the restrictions-induced weakness in services activity."