The same forces are at work that have limited net exports via a stronger euro over the last 10 years.
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Europe Industrial Output Rises More Than Forecast
By Simone Meier
June 14 (Bloomberg) — European industrial production increased more than economists forecast in April, led by demand
for intermediate goods such as steel and car engines.
Output in the economy of the 16 nations using the euro rose 0.8 percent from March, the European Union’s statistics office in Luxembourg said today. Economists had projected a gain of 0.5 percent, the median of 33 estimates in a Bloomberg survey showed. From a year earlier, April production jumped 9.5 percent, the biggest gain since the data started in 1991.
Reviving exports are helping to fuel the euro-area economy’s expansion as consumers curb spending. Continental AG, Europe’s second-largest car-parts maker, on June 10 raised its full-year sales forecast. Still, European manufacturing growth slowed in May and European Central Bank President Jean-Claude Trichet said last week that the euro region may expand at an “uneven pace” this year.
“The recovery in the export-sensitive industrial sector has been little affected so far by the region’s fiscal woes,” said Martin van Vliet, an economist at ING Group in Amsterdam. “Euro-zone industry should continue to benefit from the recovery in global demand, helped by the recent weakening of the euro.”
The 16-nation currency has fallen 15 percent against the dollar this year on concern governments’ measures to tackle swollen budget deficits may hamper economic growth in the region. The euro was little changed after the output data, trading at $1.2238 at 10:26 a.m. in London, up 1 percent.