Eurozone industrial production drops in December

Eurozone industrial output fell more than expected in December as manufacturing of capital goods dropped.

Industrial production dropped 1.6% from the month before, Eurostat said. The reading was worse than analysts' average forecast for a 0.6% drop and marked a downturn after 2.6% growth in November.

Production of capital goods dipped 3.1% after a combined jump of 9.4% in October and November. Output of intermediate goods rose 1%, registering three straight months of growth. Energy production fell 3.1% and non-durable consumer goods edged down 0.6%.

December's reading meant industrial output rose 3.9% in the fourth quarter of 2020, slower than the 16% leap in the third quarter when the single currency bloc's economies reopened. Output was 2% lower at the end of December than its pre-pandemic level.

"The setback in December didn’t dent the Q4 performance much," Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said. "The rebound will lose momentum in Q1 but the surveys suggest that there is plenty left in the tank for a continued rebound."

Vistesen predicted production would be back to pre-crisis levels by the end of February after coming close to a v-shaped recovery in December.