European Production Climbs, UK Construction Output Slumps 11.6%

Arthi Gupta
12 Oct, 2012
New York City

The European indexes declined after the euro zone production rose unexpectedly and UK construction output slumped in August. Spanish and Italian yields fell.

[R]2:00 PM Frankfurt – The European indexes declined after the euro zone production rose unexpectedly and UK construction output slumped in August. Spanish and Italian yields fell.][/R]

Markets across Europe fell as the prospect of Spanish bailout rose and politicians in the region ramp up talks as France, Italy and Spain look for ways to ease bailout conditions for Spain and Italy and Germany works with Netherlands and Austria to look for tighter implementation of austerity measures.

The European Central Bank Executive Board member Jorg Asmussen was optimistic that Greece would meet its fiscal targets for next year.

Asmussen said the ECB''s recent bond-purchase program, the Outright Monetary Transactions, should play a supportive role in changing perceptions about debt sustainability.

In Paris trading, the CAC-40 Index dipped 4.70 or 0.1% to 3,407.81 and in Frankfurt the DAX Index edged lower 7.39 or 0.1% to 7,274.02.

For the week, the CAC-40 Index declined 1.4% and the DAX Index fell 0.8%.

The yields on Spain’s benchmark 10-year declined three basis points to 5.73%. Italian 10-year yields fell two basis points to 5 %.

Euro Zone Production Climbs

Euro zone industrial production rose 0.6% from a month ago in August, the same rate of expansion as in July, estimates released by Eurostat showed today.

Industrial production fell 2.9% on a yearly basis in August, following a 2.8% drop in July.

Production of durable consumer goods increased 3.9% and non-durable consumer goods grew 1.3% from a month ago in August.

French Deficit Widens

French current account deficit widened to €4 billion in August from the revised €2.6 billion shortfall recorded in July, data published by the Bank of France showed.

UK Output Plummets

The UK construction output slumped 11.6% in August from a year ago, the Office for National Statistics said today.

During the three months to August, the volume of construction output decreased 11.9%. New work and repair and maintenance dropped 15.6% and 4.2%, respectively. The only sector that increased over this period was new private industrial work, which rose by 1.8%.

Italian Inflation Steady

Italy''s final read on inflation measured by the consumer price index was stable at 3.2% in September, as estimated earlier, data released by statistics office Istat showed.

Compared to August, consumer prices were unchanged.