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Spain not out of the woods despite encouraging industrial output data

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Spain not out of the woods despite encouraging industrial output data
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Industrial output in Spain rose in November, registering its biggest jump in nearly three years.

Production at factories, refineries and mines increased 2.6 percent from a year earlier.

However the figures appeared better than they were due to a favourable annual comparison after tax increases last year.

Analysts said output in the final three months of the year was likely to be little changed from the previous quarter.

Spain emerged from a two-year recession in the late summer .. thanks to strong exports and recovering domestic demand, but industry is still struggling to reverse a deep slump.

“There are not many signs yet that we’re seeing a recovery with any significant momentum in Spain,” said Ben May, an analyst at Captital Economics.

French economy rebounds

French GDP is likely to have grown strongly in the final quarter of last year and industrial output surged in November, figures showed on Friday, marking a welcome turnaround for the euro zone’s second largest economy.

The Bank of France estimated growth reached 0.5 percent in the fourth quarter from the previous one, signalling a strong pick-up after a contraction of 0.1 percent in the three months to September.

The INSEE official statistics agency said industrial production rose 1.3 percent in November from the previous month, easily beating economists’ average forecast of a 0.4 percent rise.

However, much of the improvement was due to temporary factors, including a jump in electricity production jumped as temperatures fell after a particularly mild October, INSEE said.

Weaker UK data

Britain’s economic recovery got a “reality check” on Friday when data showed weaker-than-expected manufacturing output, a sharp fall in the construction sector, and a slowdown in retail sales growth.

Economists said growth in the fourth quarter might now struggle to keep up the pace which has made Britain one of the fastest-growing economies among the world’s rich nations.

Official data was not seen matching up with strong industry surveys.

Output for both manufacturing and industrial production was flat month-on-month in November, and October’s increases were revised down, the Office for National Statistics said.

Economists in a Reuters poll had expected increases of 0.4 percent for manufacturing and industrial output in November.

The data was “something of a reality check for those getting a little carried away by the strength of the UK recovery,” said James Ashley, senior economist with RBC Capital Markets.