Eurozone industrial production rises more than expected

Industrial production rose more than expected in January, according to data released by Eurostat.

Production rose 2.1% in January from December, beating expectations of a 1.7% increase.

On the year, production was up 2.8% versus economists’ expectations of 1.6%. Eurostat said the increase was due to production of non-durable consumer goods rising by 7.3%, capital goods by 4.6%, durable consumer goods by 3.2% and intermediate goods by 1.9%. Production of energy fell 3.7%.

Capital Economics expressed doubt that the sharp rise in January was the beginning of a prolonged upturn.

“The boost to domestic demand from falling energy prices probably has little further to run – we expect oil prices to rise this year. And the impact of the euro’s previous falls on external demand appears to have faded. Indeed, the industrial surveys have weakened this year and the manufacturing PMI is now at a level consistent with annual industrial growth of around just 1%.

“While Eurozone industry got off to a strong start to the year, this is not enough to change our view that overall economic growth will slow from 1.5% last year to about 1.2% this year.”