Eurozone industrial output dropped by more than expected in November, according to figures from Eurostat, in the latest of a string of lacklustre economic data to come from the euro area. Industrial production in the 19-country currency bloc plunged by 1.7 percent in November on the month, marking the worst monthly reading since February 2016 when output fell by 2.1 percent. On the year, production fell in November by 3.3 percent. Germany, which boasts the largest economy in Europe, saw its industrial output fall by 1.9 percent in November on the month, according to data released last week.
Earlier predictions had forecast a 0.3 percent rise, data released last week showed.
Production also fell markedly and by more than predicted in France and Italy, the second and third economies of the bloc, national statistics offices had warned last week.
At euro zone level, the fall was mostly caused by a large monthly 2.3 percent drop in the production of capital goods, like machineries, which points to a reduced investment appetite.
The German economy shrunk by 0.2 percent in the third quarter, marking its first contraction since 2015.
Economists are now suggesting this could be the start of a downward trend for Germany, with a recession being defined as gross domestic product (GDP) falling for two consecutive quarters.
The Federal Statistics Office will publish preliminary GDP growth data for the fourth quarter and 2018 as a whole on Tuesday next week.
The manufacturing sector in Germany also nodded to a slowdown for the economy with new orders falling at the fastest rate in four years.
Markit’s Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of the economy, tumbled to a 33-month low of 51.5 in December, down from 51.8 in November.
The number is inching closer to the 50.0 level which marks a contraction.
Stefan Schilbe of HSBC described recent downcast economic data from Germany as both “bad and unexpected” as he predicted a recession “now seems likely”.
Mr Schilbe told Business Insider: “The decline was broad-based across sectors, with no bright spots.
“Manufacturing fell by 1.8 percent month-on-month with the consumer goods sector once again being the major drag.
“Today’s data were both bad and unexpected.
“A technical recession in German industry now seems likely.”