LONDON – Figures Friday showing industry across the 18-country eurozone suffering an unexpectedly big reverse at the end of 2013 reinforced the pressure on the European Central Bank to do more to shore up the recovery.
Eurostat, the EU’s statistics office, said industrial production fell a monthly 0.7 per cent in December. That was more than double the 0.3 per cent contraction anticipated in the markets and means that the region’s industry only saw output rise by 0.3 per cent in the fourth quarter.
Though up on the flat reading of the previous three-month period, it provided further evidence that the eurozone economic recovery is failing to gain much momentum — as has been hinted by a run of economic surveys over the past few months.
In fact, analysts said the downturn may also mean that the region did not grow as fast as predicted during the fourth quarter. The consensus in the markets is that the eurozone saw its annual gross domestic product rise by a quarterly rate of 0.2 per cent in the final three months of the year, double the previous quarter’s 0.1 per cent. The first estimate for the fourth quarter is due on Friday.
“We think the risks around our euro area projection (0.2 per cent) remain tilted marginally to the downside,” said James Ashley, chief European economist at RBC Capital Markets.
ECB President Mario Draghi has said that Friday’s growth figures are a key focus of attention at the bank as it decides whether to give the eurozone economy further help, possibly through a further cut in its benchmark interest rate, which is already at a record low of 0.25 per cent.
“This keeps pressure on the ECB to provide further stimulus as soon as its March meeting,” said Howard Archer, chief European economist at IHS Global Insight.