Non-euro states help EU's slow industrial recovery

Blast furnace worker Image copyright Reuters
Image caption Few sparks in Europe's industrial production figures

The slow recovery of Europe's industrial sector has been boosted by a better performance in countries outside the euro bloc.

Industrial output in the 18-nation eurozone fell 0.2% in January compared with December.

But in the full 28-country European Union (EU28), output was up 0.1%, reversing December's falls.

Compared with a year ago, industrial production grew 2.1% in the euro area and 2.4% in the EU28.

Jonathan Loynes, an economist with Capital Economics, said: "The 0.2% contraction in production was weaker than we had expected,"

He said the figures amounted to a "disappointing soft start" to the year and were "another reminder that the eurozone's economic recovery remains fragile".

French industry shrinks

Countries in the EU but outside the eurozone that recorded rises in production included the UK, Bulgaria, Croatia, Hungary, Poland, Romania and Sweden.

Germany, Europe's biggest economy, saw a month-on-month rise of 0.4% in January. The UK's industrial sector was up 0.1% after a gain of 0.5% in December.

However, France's industries contracted 1.4% on the year, accelerating from a decline of 0.2% in the year to December.

The fastest growing industrial sector is capital goods, with companies investing in new equipment. The energy sector is the only sector that is shrinking on a monthly and annual basis.

However, Howard Archer, from IHS Global Insight, said that while the figures marked a disappointing start to 2014 for manufacturing, "the underlying data was more reassuring" and pointed to an expansion in the sector.

"With latest survey evidence from the purchasing managers reasonable, the overall impression is that the eurozone manufacturing sector is currently on a modest recovery path," he said.

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