Industrial production (ex-construction) expanded surprisingly sharply in November. A 1.5 percent monthly jump was well ahead of market expectations and, following a slightly stronger revised gain in October, enough to lift annual workday adjusted growth from 0.8 percent to 3.2 percent.
Outside of a 0.1 percent dip in durable consumer goods, all of the major categories posted fresh monthly advances. Intermediates (1.6 percent) and consumer non-durables (2.9 percent) were especially robust as was energy (1.2 percent). By contrast, capital goods edged just 0.1 percent firmer.
Amongst the larger Eurozone states, Germany (0.3 percent) was relatively soft as monthly rises in France (2.2 percent), Italy (0.7 percent) and Spain (1.7 percent) were all significantly larger. Only Greece and Portugal (both minus 0.9 percent) failed to make ground and increases elsewhere were typically sizeable.
If business surveys are anything to go by, the Eurozone's November recovery in output picked up some steam in December and healthy order books point to more of the same this quarter. Indeed, even a flat performance would make for a fourth quarter increase of 1.3 percent. If so, it may be that the lagging goods producing sector is finally starting to catch up with its services counterpart. The implications for a much better balance to the economic recovery would bode well for prospects in 2017 and would certainly not damage the ECB's chances of getting inflation back up towards its near-2 percent medium-term target.