Euro zone February industry output falls, largely due to energy

Jerome Frank
April 13, 2017

A 4.7% drop in energy output in comparison to January was the main culprit, even as output of capital goods added to the prior month's 1.9% month-on-month increase by rising another 0.9%.

The decline in the IIP in February is mainly on account of 2 percent contraction in manufacturing sector, which constitutes over 75 percent of the index.

Growth slowed in all of the single currency bloc's largest economies, with production in Germany slowing from a 2.4% rise in January to a 0.8% gain in February, whereas in France it fell by 1.6%, in Spain by 0.3% and in the Netherlands by 0.5%. The non-durable consumer goods output shrank by 8.6% in February over a contraction of 4.9% year ago. Noting that the manufacturing sector continues to languish, Sunil Sinha, Principal Economist, India Ratings, said, "The overall macro-economic environment is conducive for growth but there are cyclical/structural factors both at the global as well as domestic level which is making the industrial/ manufacturing recovery a long drawn out process leaving one to wonder when will we reach the end of tunnel".

The previous low was recorded in October when the IIP contracted by 1.87 per cent.

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Consumer food price inflation however, eased to 1.93 per cent in March as compared to 2.01 per cent in February.

Retail fuel inflation accelerated to 5.56% in March from 3.90% a month ago, driving overall consumer inflation higher. The expected rate of increase for the month was 1.9 percent.

Industrial production in the Eurozone in February 2016 marked a surprising decrease by 0.3% as compared to January, data of Eurostat shows, quoted by BNR. Prices of prepared meals, snacks and candies grew by 5.65%.

Meanwhile, retail inflation rose marginally to 3.81 per cent in March from 3.55 per cent in February 2017. The rate of price rise in fuel and light was at 5.56%. "If this is so, the RBI inflation forecast of 4-4.5% will be materially undershot", it added.

Other reports by Guamnewswatch

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