12 January 2004, 11:18  German, French, Italian Industrial Production Probably Gained in November

Jan. 12 (Bloomberg) -- Industrial production in Germany, France and Italy, the three biggest nations among the dozen sharing the euro, probably rose in November to meet increased demand for exports, surveys of economists showed. Production at German factories, building sites, utilities and mines may have climbed 0.6 percent from October, according to the median forecast of 34 economists polled by Bloomberg News. French and Italian output probably gained 0.1 percent and 0.2 percent, respectively, separate economist surveys showed. The German report will be released today at noon in Berlin. Expansion in the U.S. and Asia helped the euro region's economy return to growth in the third quarter and companies including Renault SA predict profit growth this year. Europe's reliance on exports has raised concern that the euro's 22 percent gain against the dollar in the past year may crimp the recovery unless demand within the region starts to pick up.
``Europe has seen a clear improvement, especially in manufacturing, mainly due to foreign demand from the U.S. and Asia,'' said Murat Toprak, an economist at Societe Generale SA in Paris. ``Still, the economic rebound is rather fragile because of the euro's appreciation.'' Europe's single currency rose to a record $1.2872 today, according to EBS prices. The euro's increase has eroded the sales and earnings that European companies generate in the U.S. and led to calls from politicians including German Economics Minister Wolfgang Clement that the European Central Bank cut interest rates to help stem the currency's advance.
Trichet's Outlook
Faster growth abroad is helping to cushion the effect of the euro's appreciation, ECB President Jean-Claude Trichet said Thursday, after the 18-member policy council left interest rates unchanged at 2 percent. Trichet will today chair a meeting of the Group of 10 forum of central bankers in Basel, Switzerland, at which the dollar's drop may be discussed. He will comment on the talks at about 12:30 p.m. Basel time. Pointing to further growth in production, German factory orders gained for a third consecutive month in November, the government said on Friday. The increase was led by a 0.7 percent increase in export orders, with demand from within Germany, Europe's biggest economy, rising 0.4 percent. MAN AG, Europe's third-largest heavy truckmaker, predicts faster economic growth this year and a reorganization will help the Munich-based company increase profit. MAN may say on Thursday that new orders rose in the fourth quarter, recovering from a drop in the first nine months, analysts said.
German Forecast
``The recent rise in orders points to a solid output expansion in coming months and might lead to positive surprises in growth in the fourth quarter of last year and at the beginning of 2004,'' said Juergen Michels, an economist at Citigroup Inc. in London. ``However, the ongoing strengthening of the euro tends to jeopardize growth acceleration in the course of the year.'' Germany's economy probably shrank 0.1 percent in 2003 after growing 0.2 percent in 2002, according to the median forecast of 32 economists. The Federal Statistics Office will release its first estimate of gross domestic product and the budget deficit for 2003 on Thursday. Germany's economy expanded 0.2 percent in the third quarter after a recession in the first half. Industrial production in France, the second-biggest economy in the euro region, probably rose 0.1 percent in November, according to the median forecast of 18 economists surveyed. That report will be published by Insee, the government statistics office, on Tuesday at 8:50 a.m. French production rose 1.3 percent in October, the fastest pace since August 2001.
Italian Strike
``Industrial activity marked a pause'' in November, the Bank of France said in its November survey of about 12,000 manufacturers and retailers published last month. ``Foreign orders rose at a slower pace than the previous month.'' Renault, France's second-biggest carmaker, expects operating profit to increase to more than 4 percent of sales this year, compared with its forecast for a margin of 3.5 percent to 4 percent in 2003, as sales revive. Renault predicts that the French vehicle market will expand 3 percent this year. In Italy, industrial output probably grew 0.2 percent from October, the median of 17 forecasts showed. Italian national statistics office Istat is due to publish the figures at 9:30 a.m. in Rome on Friday. Production was unchanged in October as strikes hampered the manufacturing of cars.
The European Commission, the European Union's executive body, will publish growth forecasts for the fourth quarter of last year and the first quarter of 2004 at noon in Brussels on Thursday. The region's economy will probably grow 0.5 percent in the first quarter of this year, according to the median forecast of 24 economists surveyed by Bloomberg News. The EU's statistics office may also confirm on Thursday that the region grew 0.4 percent in the third quarter from the second, according to the median of 23 forecasts. The economy contracted 0.1 percent in the second quarter. //www.bloomberg.com

© 1999-2024 Forex EuroClub
All rights reserved