Written by Bart Collin
Manufacturing continues to be the Achilles heel of the euro area economy. Production has been contracting for some time now, and the slight increase in production in February is not significantly different from recent trends.thanks to sharp Due to the January production decline, overall production in the first quarter likely fell again compared to last year's fourth quarter.
February's improvement was relatively broad-based. Energy production fell by 3%, with non-durable consumer goods making a slight negative contribution. Overall output increased due to increased production of capital goods, intermediate goods, and durable goods.
All large industrial economies have seen production improve, with Germany and Spain now reporting increases for the second month in a row. France, Italy and the Netherlands all experienced significant declines in January; The increase in February was much smaller and did not make up for the losses from earlier.
There are signs of improvement here and there, but the impact on production is likely to be delayed rather than immediate. New orders for eurozone industry remain weak, but not as low as they were a few months ago. The survey shows some improvement in production expectations and overall sentiment, but the second quarter may be too early for a meaningful recovery.
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