Industrial production fell hard in the eurozone in December, raising larger concerns about the 19 nations' effect on global economic growth. According to Reuters, industrial output declined almost 1% month-over-month (MoM), half a percent more than economists predicted. Dwindling production of capital goods was the driving force behind this decline after dropping 1.5% MoM.
Bloomberg's euro index corroborated these findings, noting industrial production has fallen "at the fastest pace since the financial crisis." Stunted economic growth was noticeable in China; however, economists were more surprised by the manufacturing and household spending decreases in Germany and France, respectively.
"The concern I have right now is in Europe," Salman Ahmed, chief investment strategist at Lombard Odier, said in the Bloomberg report. "It's clear China is going through a slowdown, but there's also a strong amount of stimulus in the pipeline. However, in Europe, things are deteriorating quite fast."
Although worrying, Bloomberg economist Jamie Murray said in the report the latest revelations are more "country-specific shocks" than a larger hit to the eurozone.
"The rate of expansion will pick up as those influences fade," Murray said in the article. "Still, financial markets are acutely aware of the risks, and there's little doubt that those are now skewed to the downside."
—Andrew Michaels, editorial associate