Euro zone industrial production rose slightly more than expected month-on-month in February, data showed today, confirming strong momentum in output and adding to arguments for higher interest rates.
Industrial production in the 13 countries using the euro rose 0.6 per cent in month-on-month terms in February for a 4.1 per cent year-on-year rise, the European Union's statistics office Eurostat said today.
Ireland recorded a surge of 22.4 per cent in annual terms, German output jumped 6.8 per cent, Spain rose 3.5 per cent and France 2.5 per cent.
"The euro zone industry continues to power ahead very strongly," said Holger Schmieding, co-head of Europe economics at Bank of America.
"Economic growth in the euro zone is probably still above trend." Eurostat revised down January's output data to a 0.5 per cent monthly fall from the previously reported 0.2 per cent slip, giving a 3.4 per cent year-on-year gain, instead of a previously reported 3.7 per cent.
But economists based their views on a quarterly average, which so far is looking to be stronger in the first three months of 2007 than in the last quarter of 2006.
"The 0.6 per cent monthly rise is in line with our view that industrial output in the first quarter will be higher than the fourth because there was a relatively sharp inventory correction in Q4, and companies will be replenishing inventories," said Aline Schuiling, senior economist at Fortis bank.
In month-on-month terms output of capital goods and energy production rose the most, both up 0.8 percent, and intermediate goods increased 0.5 per cent, Eurostat said.
The monthly rise was helped by strong growth in the euro zone's biggest economy Germany as well as France and the Netherlands.
Year-on-year, capital goods production surged 7.4 per cent and intermediate goods output rose 6.7 per cent while energy production slumped 5.5 per cent.