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.


Norway oil firms lower 2019 investment forecast

Updated 21 February 2019
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Norway oil firms lower 2019 investment forecast

  • Investment forecasts for 2019 lowered to $20.06 billion
  • Several plans for development and operation (PDOs) expected to be submitted

OSLO: Oil and gas companies operating in Norway have lowered their investment forecasts for 2019 to 172.7 billion crowns ($20.06 billion) from 175.3 billion crowns seen in November, a survey by the country’s statistics agency (SSB) showed on Thursday.
In 2020, investments are expected to fall to 158.5 billion crowns according to initial forecasts, but the forecasts could be revised upwards in the months to come, it added.
“Several plans for development and operation (PDOs) are expected to be submitted to the government in both 2019 and 2020,” the agency said in a statement.
“If the schedules for these plans are realized, the accumulated investment costs in 2020 from these projects will increase the investment in field development compared to the present estimate.”
Norway’s oil and gas investments have rebounded from a sharp fall as rising crude prices and cost cuts lift industry activity. It was SSB’s fourth release of companies’ forecasts for 2019 and the first for 2020.
Equinor is Norway’s largest oil firm.