Econintersect: Industrial production (IP) continued to plummet in Europe in October, following the sharp decline in September. Over the summer IP had shown modest gains leading some to project that the autumn would see continued strength. Economists, who are really good at seeing current conditions and projecting them forward, had expected modest growth in the two most recent months, according to a Reuters poll. The October IP for the 17-country Eurozone was down 1.4% month-over-month, following a 2.3% decline in September. Both numbers were only slightly lower for the 27-country European Union (EU), -1.0% and -2.1%, respectively.
Year-over-year the October declines were 3.6% for the Eurozone and 3.1% for the E-27. Year-over-year the IP numbers have been declining for the past 18 months.
Click on graphic or table for larger image.
Uncertainty about the future of the euro has been blamed for the slowdown. From Reuters:
"Domestic demand will only turn around when uncertainty among the companies about the fate of the euro has been dispelled, prompting them to increase investment again," Ralph Solveen, an economist at Commerzbank, wrote in a research note.
Econintersect is amazed that the financial news reports are not mentioning the possibility that austerity programs have anything to do with the slowdown.
- Euro zone factory output falls again, recovery far off (Robin Emmott, Reuters, 12 December 2012)