Euro Zone Industrial Output Rises

FRANKFURT (Reuters) – Euro zone industrial output rose more than expected in February, raising hopes that the sector bottomed out after a two-year recession. Data from Eurostat showed that output in the 20 nations sharing the euro rose by 1.1% on the month, outpacing the 0.3% expected in a Reuters poll of economists, driven by a surge in demand for non-durable consumer goods.

Compared to the same month a year earlier, output was up by 1.2%, significantly ahead of expectations for a 0.8% decline, though production remained well below late 2022 levels when the industrial recession began.

Output suffered due to Russia’s war in Ukraine, which pushed crucial energy costs to record highs, alongside competition from Asia diminishing European market share. The car sector was particularly affected as consumer interest in its product range declined.

Among the euro zone’s largest economies, Germany experienced declining output, while France and Spain recorded increases.

However, U.S. tariffs, if long-lasting, may cut output again as demand from other regions and increased domestic spending are unlikely to offset lost sales in the near term, according to economists.