Bad industrial production figures point to eurozone recession

Feb 14, 2012, 10:30 GMT

Luxembourg - The European Union's statistical agency on Tuesday offered another sign of gloom for the eurozone, as it reported that industrial production in the currency bloc had declined again in December, falling by 1.1 per cent on a monthly basis.

The index has been on a downward path since September. However, Eurostat revised its figures for November, indicating that industrial production had stayed flat that month rather than having declined by 0.1 per cent, as was estimated in January.

Martin Van Vliet, an analyst from ING Bank, said the latest figures are 'likely' to feed into 'pretty dismal' forecasts for the eurozone's gross domestic product in the third quarter of 2011, which Eurostat is due to publish on Wednesday.

'We expect the eurozone economy to have contracted by around 0.4 per-cent quarter-to-quarter in the final three months of last year,' he said in a note.

In the 27-member EU, the monthly drop in industrial production was less pronounced, falling only by 0.6 per cent.

On a yearly basis, the index slipped by 2 per cent in the eurozone and by 0.6 per cent in the EU.

The worst yearly figures were recorded by Greece (-12.4 per cent), Luxembourg (-9.6 per cent) and Portugal (-8.9 per cent), while Poland (10 per cent), the Czech Republic (4.4 per cent) and Latvia (3.2 per cent) had the best performances.

In Germany - the EU's biggest economy - the index fell by 0.7 per cent.