The bulk of the fall in industrial output in the Eurozone can be attributed to weak investment appetite for capital goods, durable consumer goods, and non-durable consumer goods.
On Monday, in what amounts to a confirmation of the series of weak industrial output from the Eurozone, official data that has been released today raises concerns on the growth prospects of the bloc’s growth for the coming fourth quarter.
As per Eurostat, the European Union’s statistics office, industrial production in the bloc was down by 1.7% in November, following a 0.1% increase in October and a 0.6% drop in September. The fall in industrial out in November was the worst since February 2016, when output fell by 2.1%.
On the year, production fell in November by 3.3%. This was against a markets expectations of a drop of 1.5% monthly drop and a 2.3% drop year-on-year. Although the drop was worse than expected, the weak data does not come as a surprise since the EU’s leading economies had given negative readings in the past few days.
According to data made available last week, Germany, the bloc’s biggest economy, saw its industrial output fall by 1.9% in November against a forecasts of a 0.3% rise.
Two of the bloc’s biggest economies, France and Italy also saw a fall in production by more than they had predicted, according to the national statistics offices which disclosed the info last week.
The weak economic data comes in the wake of many economists predicting a slowdown in the last three months of this year; the Eurozone’s economy grew by just 0.2% during the third quarter; during the second quarter, the EU’s GDP rose by 0.4%.
The bulk of the weak economic data can be attributed to a large monthly 2.3% drop in the production of capital goods, thus pointing to a weak investment appetite.
The production of durable consumer goods, which includes refrigerators, fell by 1.7%, while the production of non-durable consumer goods, such as clothes, dropped by 1.0%, recording its third consecutive fall.
Energy production also fell by 0.6% in November.