Industrial production jumps as eurozone economy powers on

Overall in 2017, eurozone GDP rose 2.5 percent, Eurostat said, the fastest growth rate since a 3.0 percent rise in 2007. (Reuters)
Updated 14 February 2018
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Industrial production jumps as eurozone economy powers on

BRUSSELS: Eurozone industrial production jumped more than expected in December, data from the EU statistics office Eurostat showed on Wednesday, underlining the fastest economic growth rate in a decade that economists expect to continue in 2018.
Eurostat said industrial production in the 19 countries sharing the euro rose 0.4 percent month-on-month for a 5.2 percent year-on-year gain. Economists polled by Reuters had expected a 0.2 percent monthly and 4.2 percent annual rise.
“The acceleration of production growth is unlikely to be a one-off as the outlook for industry remains rosy,” said Bert Colijn, senior eurozone economist at ING bank.
“Given the current backlog of work in industry, it is no surprise that hiring and investment in capital goods are high on the list of businesses. This adds to the strong economic picture for the start of 2018,” he said.
The statistics office also confirmed its earlier preliminary estimate of gross domestic product growth in the eurozone in the last three months of 2017 at 0.6 percent quarter-on-quarter and 2.7 percent against the same period of 2016.
Overall in 2017, eurozone GDP rose 2.5 percent, Eurostat said, the fastest growth rate since a 3.0 percent rise in 2007.
“Looking ahead, surveys suggest that the region’s upturn will gather pace,” said Stephen Brown, European economist at Capital Economics. “We expect the eurozone’s upturn to match last year’s strong pace in 2018, with annual GDP growth of 2.5 percent.”
The GDP of Germany, the eurozone’s biggest economy, grew 0.6 percent on the quarter and 2.9 percent year-on-year in the fourth quarter, with France at 0.6 percent and 2.4 percent respectively and Spain at 0.7 and 3.1 percent respectively.
“For the year 2018 as a whole, a strong increase of 2.5 percent is still likely, even if the statisticians have slightly revised previous data downwards,” Joerg Kraemer, chief economist at Commerzbank, said in a note on Germany.
“We continue to believe that the upswing could continue for another two or three years despite the roll-back of labor market reforms because cyclical tensions on the labor market are not yet in sight,” he said.
Eurostat also revised upwards November production figures to 1.3 percent month-on-month from 1.0 percent and to 3.7 percent year-on-year from 3.2 percent.
The production surge was fueled by durable consumer goods such as refrigerators and TV sets, the output of which jumped 2.7 percent on the month in December and was 7.4 percent higher than a year earlier.
The output of intermediate goods — like parts for their production — jumped 1.4 percent for a 6.6 percent annual gain.
The production of capital goods rose 7.6 percent year-on-year in December, accelerating from 6.7 percent in the previous month, indicating that investment was picking up too.


Boeing’s 737 deliveries rise in November

Updated 32 min 14 sec ago
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Boeing’s 737 deliveries rise in November

LONDON: Boeing Co. delivered 61 of its best-selling 737 single-aisle aircraft in November, up from 50 a year earlier, suggesting that the planemaker may be finally moving past supplier problems that have dented production.
Total deliveries for the first 11 months of 2018 rose to 704 from 680 in the same period a year earlier. Boeing expects to deliver 810-815 planes in 2018.
The company has been striving to overcome production bottlenecks stemming from delays in the delivery of fuselages and engines from its suppliers.
Investors and analysts closely watch the number of planes Boeing turns over to airlines and leasing firms for cues on the company’s cash flow and efficiency.
Airbus said last week it had delivered 673 aircraft up to the end of November, leaving 109 aircraft still to be delivered in December to reach a core target of 782 deliveries.
Boeing delivered a total of 79 aircraft in November.
Chief Financial Officer Greg Smith said last month that deliveries would rebound in the last two months of the year despite supply delays in engines and other components.
The company’s deliveries could take a hit if Indonesia’s Lion Air decides to cancel orders for Boeing’s 737 MAX jets following a crash that killed 189 people in October.
Lion Air, a privately owned budget airline, has 190 Boeing jets worth $22 billion at list prices waiting to be delivered, on top of 197 already taken, making it one of the US manufacturer’s biggest export customers.