Industrial Production Probably Rose in Germany, France, Italy

[Strengthandhonour]

Industrial Production Probably Rose in Germany, France, Italy



By Matthew Brockett
Oct. 9 (Bloomberg) -- Industrial production in Germany, France and Italy probably rose in August as Europe's economy headed for the fastest annual expansion since 2000, surveys of economists show.
Production in Germany, the region's largest economy, may have increased 0.3 percent from July, according to the median of 40 estimates in a Bloomberg News survey. The Economy Ministry in Berlin will publish the report at noon today. Output probably also rose in France and Italy, the second- and third-largest economies among the 12 nations sharing the euro, surveys show.
Economic growth will reach 2.4 percent this year, the International Monetary Fund forecasts, as European exports to North America and Asia fuel domestic investment and spending. The pace may moderate next year after the European Central Bank raised interest rates five times in 10 months to quell inflation.
``We haven't seen economic growth like this in Europe for years,'' said Sylvain Broyer, an economist at Ixis CIB in Frankfurt. ``Export demand remains robust and domestic demand is stronger, so production should stay at a relatively high level even if growth slows. A December rate hike is as good as done.''
Economists and investors predict the ECB will raise its benchmark rate to 3.5 percent in December after an increase to 3.25 percent last week. Germany, France and Italy account for about two-thirds of the region's $10 trillion economy.
Increasing Orders
Industrial production probably rose 0.7 percent in France and 0.5 percent in Italy, according to the median estimates in Bloomberg surveys of economists. Both reports will be released tomorrow, the French data at 8.45 a.m. and the Italian numbers at 10 a.m.
German factory orders unexpectedly climbed 3.7 percent in August after a 2.1 percent gain in July, a report last week showed, driven by foreign and domestic demand.
That prompted economists including Nick Matthews at Barclays Capital and Sandra Petcov at Lehman Brothers to revise higher their estimates for German industrial production.
``Our best guess for production is now an increase of 1.4 percent,'' said Petcov, who previously forecast a gain of just 0.2 percent. ``There are upside risks to our 0.5 percent forecast for German third-quarter GDP growth.''
The orders ``are pretty strong data and suggest the industrial sector in Europe is doing well,'' said Dario Perkins, European economist at ABN Amro Holding NV in London. They also ``suggest the global economy is doing better than people thought, and that benefits countries like Germany, the world's biggest exporter'' of goods.
Porsche, Fiat
German exports probably rose 0.2 percent in August from July, when they jumped 2.3 percent, the median of 14 estimates in a Bloomberg survey shows. That report is due at 8 a.m. today.
Porsche AG, the German luxury carmaker, expects ``excellent'' results this fiscal year as sales in Russia and China increase, Chief Executive Officer Wendelin Wiedeking said last week. Fiat SpA, Italy's largest manufacturer, said last month it will sell 11 percent more cars this year.
Still, economic growth may slow next year as higher interest rates, slower global expansion and a sales-tax increase in Germany reduce demand for goods such as cars and mobile phones, the European Commission said Oct. 2.
While French industrial output is forecast to have increased in August, it fell in June and July as manufacturers cut their investment plans and sales at companies including PSA Peugeot Citroen SA and Renault SA dropped.
European economic growth will slow to 2 percent next year, according to the IMF. The U.S. will expand 2.9 percent after 3.4 percent this year, the Washington-based fund said Sept. 14.
Economists are divided on whether economic growth will prove strong enough to allow the ECB to continue raising interest rates next year. Eleven of 20 economists surveyed by Bloomberg News say the Frankfurt-based central bank will lift its benchmark rate to 3.75 percent in March after a quarter-point increase in December.

source: http://www.bloomberg.com/apps/news?p...d=aAQlM9ZwMHCE

[Menydh]

Is industrial production measured by GDP or GNP? Industrial delocalization to countries with more "flexible" labour markets should reflect as negative on GDP but still show as positive in GNP.