Euro zone industry output rises less than expected in January

On a yearly basis output went up by 2.5% in Dec, more than the 2% rise previously estimated

Euro zone industrial output increased less than expected in January as firms' higher investment in machinery was partially offset by a drop in the production of consumer goods, estimates from the European Union statistics office showed on Tuesday.

Eurostat said industrial production in the 19-country single currency bloc rose in January by 0.9 per cent compared to the previous month, and by 0.6 per cent year-on-year.

Both figures were lower than market expectations. A Reuters poll of economists had forecast an average monthly rise of 1.3 per cent and a 0.9 per cent increase year-on-year.

The lower-than-expected January figures were partly counterbalanced by upwardly revised data for December when industrial production fell by 1.2 per cent on the month, less than the 1.6 per cent drop initially estimated by Eurostat.

On a yearly basis output went up by 2.5 per cent in December, more than the 2 per cent rise previously estimated.

The monthly output rise in January was mostly due to a surge in production of capital goods, like machinery, which went up by 2.8 per cent, fully offsetting an equal drop in the previous month, in a sign of firms' improved prospects of future sales.

Energy output also rose by 1.9 per cent on the month.

But production of durable and non-durable consumer goods decreased. Output of durable goods, such as cars or refrigerators, went down by 0.4 per cent in January, after a 3 per cent surge in December.

Production of non-durable consumer goods was down by 0.7 per cent, compounding a 0.2 per cent December fall.

Output of intermediate goods went also down by 0.4 per cent.

At national level, a 3.3 per cent surge in the monthly output of Germany, the bloc's largest economy, was partly offset by production falls in France (-0.3 percent) and Italy (-2.3 per cent), respectively the second and third biggest economies in the euro zone.