MNI: Euro Area Industrial Production Contracts In January

--EMU January Industrial Production -1.0% vs December +0.4% 

By Jamie Satchithanantham

     LONDON (MNI) - Growth in Euro area industrial production lost some steam at

the start of 2018, with total industry output contracting between December and

January and putting a halt to a run of three consecutive monthly expansions.  

     Euro area output contracted 1.0% m/m in January, the first decline in

monthly output since September's 0.7% m/m decline, and followed December's 0.4%

m/m expansion.   

     The result was mirrored in the European Union (EU-28) data where production

also declined. Total industry output fell by 0.7% m/m in January after growth of

0.3% in December. This was also first fall in production in four months when

output fell 0.5%.

     --ENERGY HIT

     In January, on a monthly basis, the EMU contraction was driven by a marked

contraction in energy output, which fell by 6.6% on the month, in conjunction

with a 1.9% fall in production of durable consumer goods and a 1.0% drop in

intermediate goods output. The only sectors to expand on the month were capital

goods (1.2%) and non-durable consumer goods (0.1%).

     On a monthly basis, the largest decreases in industrial production in the

euro area were recorded in the Netherlands (-5.7%), Romania (-2.9%) and Spain

(-2.5%). Portugal (+2.5%), Estonia (+1.9%) and Denmark (+1.8%) fared the best. 

     Of the Union's major economies, industrial output in Germany rose 0.3%

between the final month of 2017 and the first of 2018, while in France output

fell by 2.0% m/m after a soft 0.2% m/m rise in output in December.     

     On an annual basis, production grew by 2.7% in January in EA-19, retreating

away from December's near-six-and-a-half-year high of 5.2%. 

     --CAPITAL GOODS BOOST

     Making up the softer rise between January 2017 and January 2018, capital

goods, up 8.3% y/y, was the best performer while energy output was the only

component to decline. It fell 7.4% on the year having increased modestly in

December. 

     On an annual basis, EA-19 industrial production rose by the fastest pace in

Romania(+8.5%), Estonia (+7.7%) and Sweden (+7.1%) and declined the most in the

Netherlands (-6.6%), Malta (1.7%) and Greece (1.6%). 

     Among the largest nations in the euro area, Germany's growth eased to 5.5%

from 7.2% in December. Growth in production in France dropped to 0.3% y/y in

January from 4.0% in December.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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