The European Union's statistics agency Wednesday said output fell by 0.2% from December 2013, although it was up 2.1% from January 2013. The decline in output was a surprise, with the consensus forecast of 22 economists surveyed by the Wall Street Journal last week being for an expansion of 0.5%
The decline in output may worry members of the European Central Bank's governing council, although they expect only a modest economic expansion over coming years. Last week, the central bank's economists said they expect growth of 1.2% this year and 1.5% next. At the same time, council members agreed to leave policy unchanged, a signal that officials are confident the economy is recovering and consumer prices will accelerate without further help.
While the decline in industrial output does raise questions about the strength of the economy at the start of the year, business surveys have indicated that growth is picking up, while retail sales during January rose more sharply than at any time since 2001.
The decline in output wasn't widespread across the currency area, with increases recorded in Germany and Spain. However, there was a very sharp fall in the Netherlands, the euro zone's fifth largest member, which saw output drop by 6.4% from December, while in Finland, output fell by 3.5%, and in France, it fell by 0.3%.
Figures for December were revised higher, and Eurostat now estimates that output fell 0.4% during the month, having previously calculated they fell 0.7%