Eurozone industrial output rises more than expected in September
Eurozone industrial production rose more than expected in September, according to figures released by Eurostat on Monday.
Industrial output grew 0.9% on the month following an upwardly-revised 2.0% increase in August. This was comfortably ahead of expectations for a 0.3% jump.
The production of non-durable consumer goods rose by 3.6% and capital goods by 1.5%, while the production of intermediate goods and durable consumer goods fell by 0.9%, and energy by 1.1%.
On the year, industrial production in the eurozone rose 4.9% in September following a 2.8% increase the month before.
Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said September’s increase means the industrial sector actually boosted eurozone GDP growth last quarter but the picture is not as good as it first appears.
"By country, the September figure was again driven higher by a surge in Irish production. This tends to swing around with multinationals’ transfer pricing activity. By sector meanwhile, increases in capital goods and non-durable consumer goods output more than offset another slide in both intermediate goods and energy," she said.
"Digging further into the detail we can see that, while the overall headline rose by 0.9% on the month, output in energy-intensive sectors actually fell by 0.9%, registering its fifth drop in a row. This downtrend is likely to continue, as we doubt the recent drop in energy price will be sustained, keeping energy costs high. Coupled with a likely reversal in Irish production, the continued struggles in these energy-intensive sectors will weigh on industrial output towards the end of the year, supporting our view that industry will be a drag on GDP growth in Q4, in line with the message from business surveys."