Euro-area industrial production unexpectedly declined in January as energy output dropped, underscoring the fragility of the currency bloc’s recovery from a record-long recession.

Factory output in the 18-nation euro zone slipped 0.2 per cent from December, the European Union’s statistics office in Luxembourg said today.

From a year earlier, production rose 2.1 per cent. While the euro-area economy has expanded for three straight quarters, the pace of growth hasn’t exceeded 0.3 per cent.

Unemployment remains near a record and inflation has been below the European Central Bank’s 2 per cent ceiling for more than a year.

"The risks surrounding the economic outlook for the euro area continue to be on the downside," ECB president Mario Draghi said on March 6 after the Frankfurt-based central bank left its main refinancing rate unchanged at a record low of 0.25 per cent.

Energy production fell 2.5 per cent for a second month in January and output of durable consumer goods declined 0.6 per cent, today’s report showed.

Factory production in Germany, Europe's largest economy, increased 0.4 per cent after a 0.1 per cent decline in December, Eurostat said.

In France, output fell 0.3 per cent, while it increased 1 percent in Italy.

Bloomberg