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.


US-Saudi business council reports $13bn in contracts

Updated 24 May 2019
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US-Saudi business council reports $13bn in contracts

  • Improved oil prices, combined with a government focus on spending, contributed to the rise, the council said

LONDON: The value of joint Saudi-US contracts rose to $13 billion in the first quarter of 2019, according to a business council report.

That marked the highest value of awarded contracts since the first quarter of 2015, the US-Saudi Arabian Business Council said.

The value of contracts awarded during the first quarter amounted to about half of the total value in all of last year, it added.

The contracts “included many vital projects, notably in the oil, gas, water and transport sectors,” Abdallah Jum’ah, the co-chair of the council, was reported as saying by Asharq Al-Awsat.

Energy was the top sector, with $3.1 billion of the value of contracts awarded, with many struck by Saudi Aramco. 

Improved oil prices, combined with a government focus on spending, contributed to the rise, the council said.

The construction sector also looks set for a recovery after many projects were put on hold due to the oil-price crash.

“If the pace of awarding construction contracts witnessed during the first quarter of 2019 continues for the rest of the year, the index of awarding construction contracts may return to the range we witnessed before the canceling and postponing of mega projects due to lower oil revenue,” the council said.