15 NOVEMBER 2011

INDUSTRIAL OUTPUT in the Euro area took a plunge and fell -2%, the biggest drop in the last six months according to Eurostat data, pushed down by all heavy players as industrial momentum was frozen over the Euro area's debt contagion fears following the region's bail-out fund uncertain lending capacity enlargement and consequently, the region's future.

The production of Capital Goods fell the hardest, -4.2% and dragged down Durable Consumer Goods -3.8%. Intermediate Goods followed suit and recorded -2.2% production drop. Output of Non Durable Consumer Goods rescinded -1.3% by anticipation on lesser, if not drastic, consumer demand.  The production of Energy fell -1.4%

In Germany, overall output decreased by 2.9%, its hardest fall since April,  while Italy's led the downward trend or -4.9% followed by Spain's -1.3%. The region's heavy economic weights dragged down the overall index along with member states including Portugal's -5%, and Ireland's -3.5%, two bailed-out states. In the UK, the Union's fifth largest economy including France, output moved down to nil.

In one year, overall production in the Euro area moved down by over four percentage points to +2.2% and equally in the Union. Total lack of  confidence over the region's
capacity to withstand a systemic shock sent output indices to plunge : Capital Goods production gauge landed to +5.7% (from +13% year-on-year in August) followed by Intermediate Goods  +2% (from +5%). Durable Consumer Goods turned negative to
-1.3% while Non Durable melted to +0.6% (from +3.2%).

Germany's output index recorded its weakest performance +5.5%. Italy's turned negative for the second time in six months on an annual basis and dropped -2.7%. Spain's index contracted to -1.8%. In the UK, production edged up -0.6% (from -0.8%). Poland's upward steam +7.9%  remained an exception among the Union's major weight, 3.40% on the Union's overall output. Slovakia's +7.4% production index followed by Sweden's +6.8%, Latvia +9.6%, and Lithuania +8.3% added their positive contributions to the overall index.