**Industrial production in the 16 countries that use the euro increased much more than expected in January.**The 1.7% increase between December and January was the largest monthly jump since Eurostat started producing the data in 1990.
This fuels hope that Europe’s recovery from recession is on track, and economic growth will exceed estimates.
Factory output in January 2010 compared to January 2009 was 1.4% higher, which is the first gain since April 2008.
December’s industrial performance was also revised up substantially to show a gain of 0.6% compared to November rather than a drop of 1.7%.
The eurozone economy grew by 0.1% in the last three months of 2010, but some economists hope this figure could be revised up.
The European Commission’s latest forecast suggests the eurozone economy will expand by 0.7% during the 2010 after contracting 4% in 2009.
“Given that the business surveys point to a further improvement in the industrial sector in the near term, a sharper quarterly rise [in economic growth] is certainly possible” said Ben May from Capital Economics.
“While all this is pretty encouraging, the euro’s strength and the likely slowdown in the global recovery will weigh on the [industrial] sector later in the year.”