Industrial output falls in eurozone

Industrial output slipped in the eurozone in December as a cold snap crimped activity, data yesterday showed, but economists said the outlook was promising amid signs of recovery across much of the region's weaker periphery.

Production in the 16 countries that use the euro fell 0.1 per cent from November, the European Union's statistics office, Eurostat, said. Analysts had previously forecast it would be unchanged.

There was no growth in Europe's dominant economy, Germany, which was hit by brutal weather in the run-up to Christmas. But production in both the eurozone's second and third largest economies, France and Italy, expanded 0.3 per cent.

Howard Archer, IHS Global Insight's chief European economist, said: "It is evident that industrial production in a number of eurozone countries was hit in December by severe weather."

Solid growth in the fourth quarter compared with the third, aided by three successive months of expansion in capital goods production, offered encouragement over what is one of the key elements of gross domestic product.

"The underlying strength of eurozone industrial production was highlighted by the fact that output still rose by 1.6 per cent quarter-on-quarter in the fourth quarter," Archer said.

Martin Van Vliet of ING Global Economics said: "With the positive momentum in global trade and the relatively weak (trade-weighted] euro, the industrial sector will likely continue to support the recovery over the coming months."