Eurozone industrial output bounces back but outlook remains gloomy
Eurozone industrial production grew in August thanks to increased investment in machinery, but analysts warned that the general outlook remained gloomy.
Industrial output ticked up 0.4 per cent on the previous month, ahead of market consensus of 0.3 per cent, according to figures from Eurostat.
Read more: Gloom thickens over Eurozone economy as Germany factory orders tumble
The increase, which is only the third monthly rise this year, cancelled out the 0.4 per cent drop recorded in July.
The figures revealed increased appetite for investment among factory managers, with production of capital goods such as machinery and equipment rising 1.2 per cent month-on-month following a 2.1 per cent rise in July.
The positive results could calm some fears about a slowdown of the Eurozone economy in the third quarter, with the first estimates of GDP expected at the end of the month.
However, economists remained cautious about the outlook amid a manufacturing crisis in Germany.
“A return to monthly growth in Eurozone industrial production seems unlikely to be sustained in the coming months as global demand slows,” said Alastair Neame, senior economist at the Centre for Economics and Business Research (Cebr).
“With governments so-far unwilling or unable to provide a countercyclical fiscal boost this looks set to weigh further on Eurozone growth.”
Read more: Germany enters recession territory as Eurozone close to stagnation
The Eurozone economy grew just 0.2 per cent in the second quarter, down from a 0.4 per cent expansion in the first three months of the year.
Meanwhile, the IHS Markit’s Purchasing Managers’ Index (PMI), a key indicator of economic sentiment, recorded in September the worst reading for Germany since the financial crisis in 2009.
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