Inquiring minds investigating the collapse in Europe note Euro-Zone Industrial Production Declines Steeply
Industrial production in the 17 countries that use the euro fell sharply in September as weak output across both the core and peripheral economies added to expectations for a poor third quarter gross domestic product print Thursday.
Data from the European Union’s statistical agency Eurostat showed industrial production fell 2.5% on the month in September, That was the largest fall since January 2009 and compares with August’s 0.9% increase. On the year, output dropped 2.3% after a 1.3% decline in August.
The data were weaker than expected as economists surveyed by Dow Jones Newswires last week had expected a 2.0% monthly fall and a 2.1% decline in annual terms.
Energy output fell 1.8% in September compared with August, the biggest fall since an 8.4% drop in March of this year, while a 2.8% month-on-month decline in production of non-durable consumer goods was the steepest since January 2000.
And, Eurostat said that a drop in car production across France and Germany saw both countries post monthly output falls of 2.7% and 2.1%, respectively. The fall in French output was the steepest since January 2009, while the drop in German production was the biggest since November last year.
Industrial production in Portugal fell 12.0% on the month in September, the biggest fall since records began in 2000 and was due primarily to strike action that month. And, Ireland’s 12.6% monthly drop in output was mainly driven by a drop in activity in the pharmaceutical sector, Eurostat said.
Greece GDP Plunges 7.2 Percent
Reuters reports Greece sinks deeper into depression in third quarter
Greece’s economic slump deepened in the third quarter, with output shrinking 7.2 percent on an annual basis as the debt-laden country heads into its sixth year of depression and struggles to meet its bailout targets.
The contraction was deeper than the second quarter’s 6.3 percent drop and follows the passage of a tough 2013 budget by Prime Minister Antonis Samaras’s government that is expected to continue to smother growth for most of next year.
Since 2009, the Mediterranean state’s economic decline – which Samaras has dubbed Greece’s “Great Depression” – has wiped a fifth off economic output and sent unemployment to a record high, putting one in four Greeks out of work.
The reading could point to an even grimmer outlook, analysts said, because it was offset by better-than-expected returns from the country’s vital tourism sector, which accounts for a fifth of Greece’s 215 billion euro economy.
Spain is also in recession, and fellow austerity-hit Portugal’s contraction deepened in the third quarter, with export growth slowing and domestic demand hit by an austerity programme imposed under the country’s international bailout.
Portugal’s economy shrank 3.4 percent year on year, National Statistics Institute INE said on Wednesday, accelerating from the previous quarter’s revised 3.2 percent drop.
Little to add other than things will get much worse. Expect France and Germany to take a big economic dive as well.
Mike “Mish” Shedlock