Euro zone industry output grew more than expected at 3.2% y-o-y in November

It was mostly due to a 2.9% increase in the production of non-durable consumer goods

Euro zone industrial output increased by much more than expected in November as firms sharply stepped up the production of non-durable consumer goods, such as clothing or foodstuff, a sign of better growth in the last quarter of 2016.

The European Union's statistics office Eurostat said on Thursday industrial production in the 19-country single currency bloc rose in November by 1.5 per cent during the month and by 3.2 per cent year-on-year (y-o-y).

Both figures were much higher than market expectations. A Reuters poll of economists had forecast an average monthly rise of 0.5 per cent and a 1.6 per cent increase y-o-y.

 

Eurostat also revised upwards its earlier estimates for October to a 0.1 per cent rise on the month instead of the 0.1 per cent decline previously estimated and to a 0.8 percent increase y-o-y, up from an initial 0.6 per cent.

The monthly output rise in November was mostly due to a 2.9 per cent increase in the production of non-durable consumer goods, in a sign of companies' improved expectations for consumption ahead of the Christmas shopping.

Production grew markedly on the month also for intermediate goods (1.6 per cent) and energy (1.2 per cent), while it rose only slightly for capital goods, like machinery, a sign of only limited appetite for long-term investment.

The output of durable goods, such as cars or refrigerators, was the only component of the indicator to record a drop, by 0.1 percent on the month, confirming firms' cautious approach.

Gross domestic product in the euro zone grew a modest 0.3 percent in the second and third quarter of last year, after a 0.5 percent rise in the first quarter. Economists are pointing to a possible acceleration of GDP growth in the last quarter of the year.

The German economy grew by 0.5 per cent quarter-on-quarter in the Oct-Dec period, separate data showed on Thursday.