Eurozone Industrial Output Slips 0.3% in November

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Researched by Industrial Info Resources (Sugar Land, Texas)--The eurozone industrial production figures for November provided further evidence that the sector probably contracted sharply in the final quarter of last year. According to figures from Eurostat, output from the eurozone factories fell 0.3% in November from October, which was below expectations of a 0.2% increase.

This figure also marked the third consecutive month of contraction. If output were to remain unchanged in December, it would fall 2.4% in the fourth quarter as a whole, knocking about 0.5 points off gross domestic product (GDP). Production of capital goods, which includes machinery to make other goods, increased 0.7% in November from October, following two successive months of decline.

"The output figures reinforce expectations that the eurozone economy contracted pretty sharply in the fourth quarter," said Martin van Vliet, a senior economist at ING in Amsterdam. "Our base case scenario envisages a 0.4% non-annualized quarterly decline.

"Survey indicators for the manufacturing sector suggest that the sector may remain a drag on the economy in the next few months. The slight pick-up in the [Organization for Economic Co-operation and Development]OECD-leading indicator for the eurozone in November seems to support this view."

Ireland, Greece, Spain, Italy and Portugal all saw production decline in November when compared with October. Germany reported a 0.1% monthly increase, while output in France grew 0.5% over the same period.

Trade Surplus Widens

Separately, the trade surplus in the eurozone widened to €11 billion ($14.62 billion) in November, from €7.4 billion ($9.84 billion) in October in seasonally adjusted terms. Imports fell by 1.5% on monthly basis, while exports increased 0.8%, which surprised the economists.

"In conjunction with the improvement in business confidence in December, the slow recovery of exports suggests the recent easing in financial conditions that ECB [European Central Bank] President Mario Draghi pointed out at the latest press conference should contribute to better growth prospects in the first quarter of 2013," said Michel Martinez, a senior economist at Societe Generale in Paris.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.