New orders received by Eurozone’s industrial sector rose for a fifth consecutive month in February, signaling continued growth in industrial output in the coming months.
Total industrial orders increased 0.9 percent month-on-month, but slower than January’s upwardly revised 1.2 percent gain, data released by Eurostat showed Wednesday.
Economists had forecast 1.5 percent order growth for February. The January’s figure was revised up significantly from the previously estimated 0.1 percent rise.
IHS Global Insight chief economist Howard Archer said the ongoing healthy industrial orders in February bodes well for Eurozone industrial production, at least in the near term.
While the Eurozone manufacturing sector still looks pretty well placed, the suspicion is that producers will find life more challenging as 2011 progresses with inventory corrections drawing to a close across the region and tighter fiscal policy increasingly kicking-in in a number of Eurozone countries, Archer said.
Year-on-year, new orders were 21.3 percent higher in February compared to January’s upwardly revised 21.9 percent increase. Economists had expected a 21.8 percent gain.
In the euro area, new orders, excluding more volatile heavy transport equipment, rose just 0.6 percent, indicating significant influence of this component on the overall new order growth. The annual increase was 20.8 percent compared to January’s 23.6 percent gain.
Orders for intermediate goods increased 0.5 percent month-on-month in February, while there was a 3.3 percent jump in bookings for capital goods. Demand for durable and non-durable goods also increased from the previous month.
The sharpest increase was registered in Estonia and the lowest in the U.K. German orders increased 3.2 percent month-on-month and orders placed with French manufacturers grew 2.7 percent. Italian orders were 0.5 percent higher than a month earlier, while Spanish orders fell 0.3 percent.
According to latest survey results from Markit Economics, the manufacturing sector continued to lead the private activity expansion, with the flash Purchasing Managers’ Index climbing to its second-highest level since June 2006.
In February, Eurozone industrial output also grew for a fifth month in a row, rising a seasonally adjusted 0.4 percent month-on-month, slightly faster than 0.2 percent increase in January.