Industrial Production Falls Across Europe

Industrial production fell sharply in a number of European nations during September, an indication that the continent's economy is on the brink of a sharp downturn.
A downturn would not come as a surprise to policy makers, with the European Commission slashing its growth forecasts for the European Union and the euro zone for 2012 and 2013 on Wednesday and the European Central Bank indicating Thursday that it would cut its forecasts next month.
"Overall, there will be a noticeably weaker economic dynamic in the winter half-year," the ministry wrote. 
In its monthly note on the economic outlook, Germany's finance ministry Friday warned that Europe's largest national economy will weaken "noticeably" during the winter months as companies hold back on investments because of the euro zone's fiscal and banking crisis.
In France, figures released Friday showed industrial production fell 2.7% from a month earlier, while in Italy production fell by 1.5% in seasonally-adjusted terms. The data followed the release of figures Wednesday that showed industrial production in Germany fell by 1.8%, and figures from Ireland Tuesday that showed output fell by a staggering 13.9%.
In both the euro zone and EU economies, the provision of services is by far the largest economic activity. But industrial production is more volatile, and tends to have a greater influence on the rate at which economies are growing or contracting.
The widespread decline in September comes after modest expansions in July and August, and suggests production in the third quarter as a whole was down, an indication that figures to be released Thursday will show the euro zone's economy contracted again in the third quarter.
The European auto industry is one of the largest employers in Europe with about two million direct jobs and another 10 million in related manufacturing including other sectors such as steel, chemical and textile. Auto makers produce more than 17 million cars, trucks, vans and buses in Europe annually, which is roughly 24% of global vehicle production, according to data from industry association ACEA.
The European Commission plans to bring together auto makers, trade union representatives and industry ministers by the end of November to discuss measures to tackle the deepening crisis in the region's car industry and take coordinated action to improve competitiveness.
Europe isn't alone in experiencing an industrial slowdown. Figures compiled by the Netherlands Bureau for Economic Policy Analysis show global industrial output was flat in August, with contractions in the U.S. and Japan, while surveys of purchasing managers indicate output fell again in October. While outside the euro zone there are signs that new orders are picking up, within the currency area orders continued to fall, indicate output will too during coming months.