In January Euro Area IP rose by a strong 0.9%. MFG output advanced at a 1.2% pace and even consumer goods output was strong with a gain of 0.8%. Consumer durables output led the advance within consumption with a rise of 1.9% in the month. But capital goods expansion was stronger still, rising by 2.7% in January as intermediate goods output rose by 0.8%. These figures left Yr/Yr trends strong as MFG output rose at a 3.2% pace over 12 months and capital equipment rose at a 7.3% pace. Yr/Yr consumer output was up by just 1.3%. However, in the new quarter with one month’s data overall IP is expanding at a 7.2% pace led by capital equipment which is up at a 15.5% pace. Even consumer output is rising at a strong 4.4% pace in the new quarter.

As we saw in the country detail IP reports earlier, several EMU nations experienced some exceptional factors that augmented growth in January. The Bundesbank is looking for overall German growth to slow below trend there. There is also the strong euro’s impact to consider. While January was a stronger month it is best to be wary of what the future holds for IP trends in the months ahead.