Bert Colijn, Research Analyst at ING, notes that the industrial production in the Eurozone has increased by 2.1% m-o-m in January after decreasing by a revised -0.5% in December, which was previously estimated to be -1%.
Key Quotes
“As the Eurozone PMI for manufacturing had declined sharply among January’s market turmoil, estimates for growth in industrial production had been more conservative. The improvements were strong across subindustries, as capital goods production grew 3.9%, while energy and non-durable consumer goods production also grew quickly at 2.4%. The German growth of 2.9% was a strong contributor to the overall growth rate, but France and Italy also showed strong improvements in industrial output.
Anyone that has been following the news regarding the ECB decision to expand QE recently, must have gotten the idea that the Eurozone economy is in terrible shape. While inflation is indeed far from the ECB target, the performance of the Eurozone economy has not been all that bad though. Especially given the fact that January was a month full of market turmoil and decreasing sentiment among businesses and consumers, it is positive to see that output in the industrial sector increased significantly.
Retail sales and unemployment for January had also positively surprised analysts, meaning that the ‘hard indicators’ have so far exceeded expectations. It remains to be seen whether the concerns about weakening growth and low oil prices have not damaged the Eurozone economy more in February, but the first indications of growth in the first quarter of 2016 do not disappoint.”
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