- Chris Williamson, chief economist at Markit
Another sign the 17-nation bloc is still struggling to build up momentum occurred on Thursday, as the EU statistics agency said that industrial output shrank unexpectedly in October. Soon after the report the single currency pulled back from 1.38 and was traded at 1.3764. The industrial output, which is considered as a leading indicator of economic health as businesses reacts quickly to any changes in the business cycle, sank 1.1% in October. This comes after a 0.3% drop a month earlier, and well below analysts' expectations for a 0.3% gain. On a yearly basis, however, output advanced 0.2% in the reported period, while analysts estimated a more positive reading of 1.1% annual growth.
When having a look at industrial output in Europe's leading economies, the main disappointment came from its number one economy, Germany, where the measure edged down 1.2% on a monthly basis. Moreover, French industrial sector remained in contraction territory as well. Surprising on the upside, activity at Italian factories picked up 0.5%.
A PMI survey conducted by Markit showed that manufacturing production in the bloc expanded at a faster pace both in October and November, while official figures are suggesting just the opposite and are raising concerns the economy will not be able to meet its final quarter's growth projections.
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