Euro zone output beats consensus, maybe 'last hurrah'

By Jan Strupczewski

BRUSSELS (Reuters) - Euro zone industrial output grew more than expected in February but economists cautioned that taken with the latest sentiment data, the numbers could be the euro zone's last hurrah before a slowdown sets in.

Production in the 15 countries using the euro rose 0.3 percent month-on-month for an annual gain of 3.1 percent, the European Union statistics office said on Monday.

Economists polled by Reuters had expected a 0.2 percent monthly rise and a 2.9 percent annual gain.

"If you look at the headwinds to economic growth -- and the world's biggest economy is slowing -- it's pretty likely we are going to see a slowdown," said Ken Wattret, economist at BNP Paribas. "I am sure we have already seen the peak in the cycle and maybe this is the last hurrah."

Eurostat revised down its previously released January figures to a monthly rise of 0.6 percent from 0.9 percent and an annual gain of 3.3 percent from 3.8 percent.

"These readings leave output growth on track to accelerate significantly in the first quarter, after the slowdown in the fourth, suggesting that the euro zone economy held up relatively well last quarter," said Nick Kounis, economist at Fortis.

"Nevertheless, the recent strength in the industrial sector is unlikely to last given the sizeable drag that the rise in the euro and slower U.S. demand are likely to exercise," he said.

The February gain in production was driven mainly by the production of capital goods and energy.