Source:Eurostat

16 FEBRUARY 2012

Industrial output fell -2% in the Euro area month-on-month in December hammered by the single currency region risk-high context which included sovereign downgrades warnings addressed to 15 member states and including Europe's bail-out fund, the European Financial Stability Facility (EFSF), on top of banks final recapitalization obligations amid a currency liquidity crunch, and the International Monetary Fund‘s(IMF) refusal for a loan disbursement to Greece pending a faster privatization program. The European Central Bank's (ECB) intervention, two one-day liquidity operations, and separately three-year loans offer at an unbeatable 1%, brought some relief to the region as well as the Euro's monthly foreign exchange average, at USD 1.31 (against USD 1.35 in November) for weary export-led sectors. 

However, the lack of consumer demand triggered by austerity measures, record high unemployment at 10.4%, and the region's unstable context aggravated output halts: the production of Capital Goods dipped -0.8% (from +0.2%) and Intermediate Goods -0.7% (from +0.5%) while demand for energy declined -2% due to mild weather and slow industrial consumption.  The production of Durable Consumer Goods therefore picked up a modest +0.2% (from -0.5%) as sales of new passenger cars plummeted by year-end. Output of Non Durable Consumer Goods moved up to nil (from -0.8%) and despite the festive holiday season as a weak buying power forced arbitrage on households. 
In Germany, the industrial production index fell twofold that of France's or -2.7%, while inversely, Italy recorded +1.4% rebound followed by Spain's +0.9%. Besides the Euro area's four, in the UK, the region's fifth largest economy, output surged +0.5% from negative territory. However, Nordic states improved momentum pointed towards an economic pick-up as output climbed respectively +2.6% in Finland, +1.2% in Sweden and +3.3% in Denmark, their biggest month-on-month surge in the last six months. In Poland, the largest eastern Europe economy, production moved down to +0.9% (from +1.6%).

In one year, overall output in the Euro area mirrored December performance, the first mechanic drop since July and annually. Energy output and Durable Consumer Goods accounted for the index fall, respectively -11.9% and -3.9%
The production of Capital Goods melted over four fold to +0.8%, and Intermediate Goods contracted -0.5%. Output of Non Durable Consumer Goods climbed a few percentage points but stayed in negative territory at -0.8%.

In Germany, production slid -0.7%, the country's first negative performance, while Italy's rose to -1.7%. Spain's index rose nearly by half to -3.7% and the UK's by one percentage point to -2.7%. Finland, Sweden and Denmark benefited from their respective momentum rebound and moved back in the black, respectively +1.5%, +2.2% and +2.9%. Poland recorded the strongest production rise, +10%, although gained step-by-step, but with resilience.