Euro industrial production records worst drop in three-years
Euro-area industrial production dropped the most in more than three years in September, led by double-digit declines in Portugal and Ireland.
Output in the 17-nation euro area fell 2.5 per cent from August, when it increased 0.9 per cent, the European Union’s statistics office in Luxembourg said today. Economists had projected a drop of 2 per cent, according to the median of 35 estimates in a Bloomberg News survey. From a year earlier, September output slumped 2.3 per cent.
European companies are struggling to maintain sales and earnings as the euro-area economy weakens under pressure from the fiscal crisis and faltering global growth. The EU last week cut its 2013 growth forecast for the euro-area economy to just 0.1 per cent, down from a May projection of 1 per cent.
“The latest growth indicators around the world, as well as the high levels of unemployment in the EU, raise concerns about our economic prospects,” EU Economic and Monetary Affairs Commissioner Olli Rehn said today in the text of a speech in Brussels. “The indicators point to further short-term weakness.”
The euro, which has declined more than 6 per cent against the dollar in the past year, traded at $US1.2756 in Brussels, up 0.4 per cent on the day.
The euro-area unemployment rate is at a record 11.6 per cent and at least five nations in the bloc are in a recession. Services and manufacturing output in the area contracted for a ninth month in October, data show.
Euro-area gross domestic product probably shrank 0.1 per cent in the third quarter after a 0.2 per cent decline in the previous three months, according to a Bloomberg News survey of economists. The statistics agency will release the GDP report tomorrow.
Industrial output dropped 12.6 per cent in Ireland and 12 per cent in Portugal in September from the prior month, today’s data showed. In Germany, Europe’s largest economy, industrial production fell 2.1 per cent, while France showed a 2.7 per cent decrease.