Cogs of eurozone growth grind dangerously close to a halt
By Michael Northcott Tuesday, 15 January 2013
More bad news from across the Channel: eurozone factory output fell in November last year for the third month in a row and German economic growth slowed sharply in 2012.
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Well, if you were hoping for some bumper figures to come out of Europe to kick off the New Year, today is a disappointing day. Eurozone factory output fell 0.3% in November 2012, the third consecutive month of contraction. It’s doubly bad because analysts were expecting a rise in factory output, and because it means that eurozone production is now 3.7% lower than it was a year ago.
On the upside, the speed at which output is declining is slowing – in October there was a much larger 1% drop in output compared with the same period the previous year. Also, analysts have pointed to the fact that in November, production of ‘capital goods’, which includes equipment and machinery for producing other products, rose by 0.7%. This, they say, suggests there could be an upturn in production on the way.
Meanwhile, it seems you can’t always rely on the ‘economic miracle’ that is Germany to cough out some good figures. The country’s GDP growth for 2012 slowed to 0.7%, a sharp slowdown compared with the 3% growth in 2011. It suggests that Q4 of 2012 showed a massive slowdown, taking the year-average down with it.
Destatis, Germany’s statistics office, said: ‘In 2012, the German economy proved to be resistant in a difficult economic environment and withstood the European recession,’ but top statistician Norbert Raeth added: ‘The full-year growth figure [of 0.7%] implies a contraction of around half a percentage point in the fourth quarter.’
If even Germany is struggling to get growth, we’re not hopeful that the rest of the eurozone will be out of the doldrums any time soon.