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Tuesday, 18 December, 2001, 14:47 GMT
Eurozone output slips
European Central Bank headquarters, Frankfurt
Output continues to slip across Europe
Industrial output in the 12 countries of the Eurozone slumped in October, reinforcing expectations that interest rates will come down early next year.

According to Eurostat, production fell 1.4% in November alone.

The biggest falls in individual states were seen in Germany, Portugal, the Netherlands and Ireland.

Industrial output (% change vs October 2000)
Belgium: -0.6%
Finland: -6.1%
France: -1.0%
Germany: -3.9%
Ireland: -5.8%
Italy: -2.8%
Luxembourg: +8.6%
Netherlands: -5.4%
Portugal: -1.0%
Spain: +1.1%

Data for Austria and Greece not available
Only Spain and Luxembourg registered a rise from September.

The slide follows a 0.7% shrinkage in September. Compared with October 2000, output was down 2.7%.

Economists had expected a fall, after numbers from France, Germany and Italy in recent weeks revealed a sharp deterioration in industrial performance there.

But even so, the decline was worse than they had expected, driven by a sharp downturn in output of consumer durable goods - the sector which includes cars.

Inflation moderating

The unexpected weakness coincided with confirmation from Eurostat of its estimate of inflation for November, which sank to 2.1% from 2.4% the month before.

The European Central Bank has a target of 2% for inflation across the 12-state Eurozone.

The raw price data caps a string of figures which suggest not only that inflation is under control, but that the slowdown gripping Europe is a long way from stoking it up again.

Even a slight upturn in Germany's key Ifo business confidence index - to 84.9 from 84.7 in October - has not dampened the gloom among economists, who see any recovery as being at least six months away.

One size fits all?

Still, even within the inflation figures, there remains a wide variation of economic performance - the very factor on which the European Central Bank has sometimes relied to justify its inaction in the past.

Prices in France were just 1.3% and in Luxembourg 1.4% higher than in November last year, with Germany, Denmark, Belgium, Austria and Finland also recording inflation below the headline rate.

But Spain's rate was 2.8%, while Ireland's was 3.4%, Portugal's 4.1% and the Netherlands 4.8%.

See also:

13 Dec 01 | Business
Eurozone faces subdued growth
07 Dec 01 | Business
German industry slumps
06 Dec 01 | Business
ECB holds rates steady
04 Dec 01 | Business
Eurozone confidence slumps
29 Nov 01 | Business
Eurozone barely growing
12 Nov 01 | Business
Eurozone inflation to remain low
13 Sep 01 | Business
Eurozone growth slows to a crawl
21 Sep 01 | Business
German business confidence falls
23 Jul 01 | Business
German confidence hits five-year low
22 Jun 01 | Business
German business confidence slumps
27 Apr 01 | Business
French economy outshines Germany
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