LONDON (AP) — Industrial production in the 16 countries that use the euro rose by a monthly rate of 1 percent in November, official figures showed Thursday ahead of the latest interest rate decision from the European Central Bank.
The figure, published by EU statistics office Eurostat, was double market expectations and more than reversed the 0.3 percent decline reported in October, which itself was an improvement on the initial 0.6 percent estimate.
The monthly increase also helped trim the annual decline to 7.1 percent from the previous month’s 10.9 percent. The annual rate of decline is at its smallest since October 2008.
Industrial output, which is crucial for the eurozone economy, has risen consistently in recent months — output has risen in six out of seven months — and has played a crucial role in the eurozone’s recovery from recession in the third quarter.
Despite that, the European Central Bank is not expected to increase its benchmark interest rate from the current historic low of 1 percent any time soon amid subdued consumer spending and mounting concerns about the debt difficulties facing a number of member countries, in particular Greece.
Jennifer McKeown, senior European economist at Capital Economics, said the data were a “pleasant surprise” but that the sector was unlikely to boost total activity in the fourth quarter of 2009 as much as it did in the third quarter, and “perhaps leaving the economy to more or less stagnate.”
In the wider 27 country EU, which includes non-euro members such as Britain and Sweden, industrial output rose by a monthly 0.9 percent, more than reversing October’s 0.7 percent decline.
On an annual basis, EU production was 6.4 percent lower in November against October’s 10.1 percent decline.