- POSTED: 12 Dec 2013 20:21
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Eurozone industrial output fell sharply in October, the latest sign that a very modest recovery from recession is struggling to gain traction, official data showed Thursday.
BRUSSELS: Eurozone industrial output fell sharply in October, the latest sign that a fragile recovery from recession is struggling to gain traction, official data showed on Thursday.
Industrial output in the 17-nation eurozone dropped 1.1 percent in October compared with activity in September when it fell a revised 0.2 percent, the Eurostat statistics agency said.
In the full 28-member European Union, industrial production fell 0.7 percent after a marginal gain of 0.1 percent in September, Eurostat said.
Analysts were divided on their reading of the data, with one saying it showed that the bloc could not count on the industrial sector to drive its recovery, while another suggested it would be just a temporary blip.
But the latest data, coming after weak national industrial figures from eurozone powerhouse Germany, weighed on European stock markets
The biggest fall was in Ireland with a drop of 11.6 percent, while the biggest gain was in Lithuania, up 2.2 percent.
EU powerhouse Germany fell 1.2 percent after a downturn of 0.7 percent, with France off 0.3 percent, the same as in September.
Non-euro Britain was up 0.4 percent after a gain of 0.9 percent.
Compared with October 2012, eurozone industrial output, a broad measure of manufacturing activity, was up 0.2 percent while the EU gained 0.8 percent.
Capital Economics analyst Ben May said the data "paint a pretty downbeat picture and suggest that the industrial sector cannot be relied on to drive a wider euro-zone economic recovery".
However, Tom Rogers, a senior economic adviser to the Ernst and Young Eurozone Forecast said that while the data looked disappointing, it "would seem largely to reflect a reaction to the stock building that took place in the third quarter".
"As such, while the numbers do underline the relative fragility of the eurozone recovery, they shouldn't provide too much ground for pessimism over a relapse into recession in the final quarter of the year," he said.
"As confidence continues slowly building among eurozone firms and households, the recovery towards modest but stable growth should continue in 2014. Our forecast, out earlier this week, predicts growth of 0.9 percent for next year."
Industrial output figures can be volatile but the weakness seen in the last few months is cause for concern after the eurozone finally escaped a record 18-month recession in the second quarter with growth of 0.3 percent.
For the third quarter, however, growth slowed to just 0.1 percent.