“Euro-area industrial output fell more than economists forecast in January, adding to signs that the region’s recession extended into the first quarter.
Factory production in the 17-nation euro zone dropped 0.4 percent from December, when it rose a revised 0.9 percent, the European Union’s statistics office in Luxembourg said today. The median forecast in a Bloomberg News survey of 32 economists was for a 0.1 percent decline. Production fell 1.3 percent in January from a year earlier.
The euro-region economy is struggling to regain momentum after five straight quarters of contraction, with unemployment at a record 11.9 percent. The economy will shrink again in the first three months of 2013 before returning to growth, according to a separate Bloomberg survey, while the European Central Bankhas forecast a 0.5 percent contraction this year.
“The euro zone’s economic recovery is likely to be excruciatingly slow,” Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam, said before the data were released. “With growth so weak and inflation likely to continue to fall toward low levels, we think there is room for more stimulus and the ECB should be more proactive.”
Manufacturing Index
Euro-area manufacturing remained weak in February, according to Markit Economics Ltd. Itsmonthly factory index held at 47.9 last month, below the 50 mark that divides contraction from expansion. The gauge has been below that level for more than a year and a half.
“The underlying trend for the European economy is still one of contraction,” Kounis said. “Business surveys which are a little more forward looking are starting to edge toward levels consistent with stabilization, but they are still away from that.”
Industrial output in Germany, Europe’s largest economy, slipped 0.4 percent in January after a 0.8 percent gain in December, today’s report showed. France reported a decline of 1.2 percent, while Spanish output rose 0.6 percent. The statistics office didn’t report data for Italy….”
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