Appliance Repair Services: Eurozone Industry Output Falls Again

Thursday, December 13, 2012

Eurozone Industry Output Falls Again

Wednesday, December 12 12:07:35

Euro zone factory output continued its steep fall in autumn this year, underscoring the feeble domestic demand that risks prolonging the bloc's recession.

Industrial production in the 17 countries sharing the euro fell 1.4 percent in October after falling sharply percent in September, the EU's statistics office Eurostat said today.

That was much worse than the modest growth expected by economists in a Reuters poll.

Factories had proved surprisingly resilient over the European summer, posting two months of moderate gains, but the new data supports forecasts of a third quarterly contraction in the euro zone's economy in the October-to-December period.

After three years of a debt crisis that has driven unemployment to a record level and pushed governments to slash spending, the economy is caught in a spiral: households are not spending and so companies are not selling, forcing them to cut staff which then further weakens consumption.

"Domestic demand will only turn around when uncertainty among the companies about the fate of the euro has been dispelled, prompting them to increase investment again," Ralph Solveen, an economist at Commerzbank, wrote in a research note. (C ) Reuters

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