Industrial production bounced back surprisingly strongly in January. Following a smaller revised, but still sizeable, 2.4 percent monthly fall in December, output expanded fully 2.8 percent, its best performance since July 2011. Even so, annual growth only edged up from minus 0.2 percent to 0.0 percent and the level of production was still short of that seen in last August.
That said, the underlying data were more impressive as the key manufacturing subsector saw a 3.7 percent surge that easily more than reversed December's 2.7 percent slump. Capital goods jumped fully 6.1 percent, consumer goods were up 2.3 percent and intermediates 1.7 percent. Weighing on overall production were construction (minus 1.3 percent) and energy 0.7 percent).
January's recovery puts industrial production a tidy 1.3 percent above its fourth quarter average and so should set the scene for a good first quarter. However, with manufacturing orders nosediving in the same month (see yesterday's calendar entry), there are still some downsides risks. Output is clearly trending upwards but, in line with the orders situation, at what rate is currently unclear.