Eurozone industrial output tumbles raising fear of economic contraction
OUTPUT at factories in the Eurozone tumbled in December, reflecting a sick European economy that probably shrank at the end of 2011, though market watchers hope it will recover this year.
Industrial production in the 17 countries sharing the euro fell 1.1 per cent in December from November, official data showed.
On an annual basis, factory output dived two per cent, worse than economists’ one per cent estimate, European Union statistics office Eurostat said, as Europe’s sovereign debt crisis continued to damage morale among shoppers and businesses alike.
EU data out today is set to show the Eurozone’s economy contracted in the October-to-December period last year compared to the third quarter.
With industrial production falling 1.8 per cent in the fourth quarter, many economists expect GDP to have shrunk by 0.3 per cent.
That would be the first move into negative territory for the Eurozone’s economy since the second quarter of 2009 at the height of the global financial crisis, when output shrunk 0.2 per cent, according to Eurostat.
“December’s Eurozone industrial production data adds to evidence that the economy shrunk pretty sharply in the fourth quarter,” said Ben May, an economist at Capital Economics in London, who predicts a deeper, 0.5 per cent fall in GDP.
In Germany, the bloc’s biggest economy, industrial production plunged 2.7 per cent in December.