February's hefty rise in euro-zone industrial production provides reassurance that the economy is starting to feel the benefits of a weaker euro and lower oil price. The 1.1% monthly increase in production was much stronger than the consensus forecast of +0.4% and left the annual growth rate at 1.6%.
Though January's fall was revised to show a bigger contraction of -0.3%. The country breakdown largely confirmed the national data already published, with Germany, Italy and Spain all recording decent monthly rises in industrial production.
But the overall euro-zone figure was boosted by a surge in Irish industrial production of 16.3% on the month. Encouragingly, the euro-zone breakdown by sector revealed that February's increase was broad-based with all components recording monthly rises.
"February's increase strongly suggests that industry fared better in Q1 than it did in Q4. A flat reading in March would leave production up by about 0.9% on the quarter in Q1, a significant improvement on Q4's 0.4% gain. But after February's sharp increase, it would be no surprise to see production fall back in March", notes Capital Economics in a report on Wednesday.
