MW: Eurozone industrial output steps up in January
The eurozone's factories, mines and utilities stepped up production as 2017 got under way, a fresh indication the currency area's economic recovery may be strengthening.
The eurozone's economy has been growing since mid-2013, but at a modest pace that has left unemployment high and underlying inflation weak. But surveys of businesses and households released this year suggest growth is picking up, with European Central Bank President Mario Draghi last week declaring his optimism that the recovery is "steadily firming."
But there has been little hard economic data to back up that view, with the first figures for January released last week recording a surprise drop in retail sales.
The European Union's statistics agency Tuesday said industrial production in the eurozone rose by 0.9% in January from December, and by 0.6% from the same month in 2016. It also revised its figures for December, recording a smaller drop in output for that month.
The rise in output during January wasn't as sharp as the 1.4% forecast by economists, so there will be some doubts about whether the recovery really is speeding up.
A survey of purchasing managers at 5,000 manufacturers and service providers suggested activity grew at the fastest rate in almost six years during February, while the ECB's economists last week raised their growth forecast for the year to 1.8% from 1.7%, which would mark a slight acceleration from 2016.
However, economists expect household spending to be damped by a recent rise in energy and food prices, which leaves less money to spend on other goods and services. They also worry that uncertainties about government policy ahead of coming elections across the eurozone may weaken investment spending.