European Industry Shows Signs of Life as Output Beats Estimates

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European Industry Shows Signs of Life as Output Beats Estimates(Bloomberg) -- Europe’s economy got a shot in the arm on Friday with a report showing the biggest jump in industrial production in four months.Output jumped 0.9% from the previous month, beating the 0.2% median estimate of economists. Capital goods and consumer goods both saw strong gains.The figures follow positive national reports from the region’s largest economies -- Germany, France, Italy and Spain. All four posted increases in May, the first time that’s happened since last summer.The data, which can be volatile, may not be enough to shift the European Central Bank from its current path toward adding more monetary stimulus. The outlook is still clouded by trade tensions that have hit confidence, and forward-looking surveys, as well as comments from company executives, still offer reason for caution.BASF SE, the world’s largest chemical maker, shocked markets this week with a huge profit warning, and Germany’s car industry is still suffering from industry-related problems. On Friday, Daimler AG issued its fourth such warning in just over a year, this time blaming higher costs to deal with a recall for faulty airbags and increasing funds set aside to address allegations of emissions tampering.The European Commission on Wednesday cut its euro-area growth and inflation forecast for 2020, suggesting that the weakness that’s characterized the first half of the year will stick around.Most investors and economists have penciled in an ECB interest-rate cut by September, though some say the central bank could act as soon as this month. There’s also a chance it restarts bond purchases, having only brought the program to a close at the end of 2018.\--With assistance from Harumi Ichikura and Kristian Siedenburg.To contact the reporter on this story: Fergal O'Brien in Zurich at fobrien@bloomberg.netTo contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Zoe Schneeweiss, Paul GordonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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