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Euro zone industry output tumbles in largest fall in nearly three years

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Euro zone industry output tumbles in largest fall in nearly three years
FILE PHOTO: A woman checks a Bosch Exxcel integrated fridge freezer series 8 during the IFA Electronics show in Berlin September 4, 2014. REUTERS/Hannibal Hanschke   -   Copyright  Hannibal Hanschke(Reuters)
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BRUSSELS (Reuters) – Euro zone industrial output fell in November by more than expected, official data showed on Monday, confirming the series of weak national data which have raised concerns about the bloc’s growth in the final quarter of the year.

The European Union’s statistics office Eurostat estimated industrial production in the 19-country currency bloc plunged by 1.7 percent in November on the month after a modest, downwardly revised 0.1 percent increase in October and a 0.6 percent drop in September.

November was the worst monthly reading since February 2016, when output fell by 2.1 percent.

On the year, production fell in November by 3.3 percent.

Economists polled by Reuters had expected a drop but smaller than official estimates show. Markets expectations were for a 1.5 percent monthly drop and a 2.3 percent fall year-on-year.

Although worse than expected, the weak data do not come as a surprise as they follow negative readings in the bloc’s main economies released in past days.

Germany, the largest economy in the euro zone, saw its industrial output fall by 1.9 percent in November on the month against earlier forecasts of a 0.3 percent rise, data released last week showed.

Production also fell markedly and by more than predicted in France and Italy, the second and third economies of the bloc, national statistics offices had warned last week.

Many economists have since predicted slow growth in the last three months of this year, after the bloc’s economy grew by only 0.2 percent in the third quarter, from a 0.4 percent GDP rise in the second quarter.

At euro zone level, the fall was mostly caused by a large monthly 2.3 percent drop in the production of capital goods, like machineries, which points to a reduced investment appetite.

Output of durable consumer goods, like fridges, fell by 1.7 percent, while production of non-durable consumer goods, such as clothes, dropped by 1.0 percent, recording its third consecutive fall.

Energy production also fell by 0.6 percent on the month.

(Reporting by Francesco Guarascio; editing by Philip Blenkinsop)

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