Is industry defying the strong euro?

Not only did November's industrial production figures indicate that euro-zone GDP may have risen more strongly in Q4 than in Q3, but they also suggested that the euro's strength is not overwhelming the export orientated sector. In the near term, we suspect that any negative effects from the strong currency will continue to be offset by a pick-up in global demand and, to a lesser extent, exporters reducing their prices. Nonetheless, a robust industrial recovery seems unlikely, implying that euro-zone GDP growth this year will be unspectacular.