Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

A worker fixes a teapot in an Italian factory.

STEFANO RELLANDINI/REUTERS

Output at euro zone factories grew much more than expected in August, helped by summer demand for food and French car production, but industry's apparent resilience is unlikely to be enough to avoid a recession in the indebted region this year.

Industrial production in the 17 countries sharing the euro rose 0.6 per cent in August from July, the EU's statistics office Eurostat said on Friday, beating expectations of a 0.4 per cent fall forecast by economists in a Reuters poll.

That was lifted by a strong showing in France and Italy, which along with Germany make up around two thirds of the euro zone's industrial output.

Story continues below advertisement

Production of durable consumer goods such as cars and televisions jumped almost 4 per cent in August, while non-durable goods output – drinks and processed food – rose 1.3 per cent.

But industrial production in August is notoriously volatile as factories slow output or close altogether during the European summer holiday, meaning investors will be looking to figures from September onwards to get a real sense of the economy.

The International Monetary Fund forecasts a deeper-than-expected contraction of 0.4 per cent in the euro zone this year as record unemployment, stubborn inflation and government austerity force households and businesses to drastically cut back. Despite hopes for a recovery next year, the IMF sees growth of just 0.2 per cent in 2013.

That sober outlook was underscored by industrial production data on an annual basis, which fell 2.9 per cent in August, the biggest drop in at least six months.

With governments cutting everything from pensions to defence spending across Europe to bring down their debts and deficits, Germany and France – the euro zone's two largest economies – are finding it harder to find buyers for their products.

German industry output fell 1.6 per cent in August on an annual basis and in Italy, there was a drop of 5.2 per cent.

As the three-year euro zone crisis impacts business confidence across the world, the World Bank has also warned of a worsening slowdown in China, a major importer of European goods.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies