LONDON—Industrial output in the 17 nations that use the euro rose at its fastest pace in more than 2½ years during the three months to June, an indication that the currency area has emerged from its longest postwar contraction.
However, the rise in industrial output in the euro zone as a whole was heavily reliant on a strong pickup in Germany, while activity in a number of other members—including France—declined. That suggests any recovery in the bloc's economy will likely be modest and patchy.
The European Union's Eurostat statistics agency Tuesday said industrial output in June rose 0.7% from May, and 0.3% from the same month of 2012. The month-to-month increase was slightly weaker than expectations, with economists surveyed by The Wall Street Journal last week estimating a 0.8% rise in output.
In the second quarter as a whole, industrial output was up 1.1% from the three months to March, the largest quarter-to-quarter increase since the final three months of 2010, when production was up by 2.2%.
The increase in industrial production suggests the euro-zone economy's long contraction has ended. Euro-zone gross domestic product began to fall in the final quarter of 2011, and continued throughout 2012 and into the first quarter of 2013.
Economists surveyed by the Journal expect figures to be released by Eurostat on Wednesday to show GDP rose 0.2% in the second quarter from the first.
"These data support the view that the euro-zone as a whole may have exited recession," said Ben May, an economist at Capital Economics. "But we doubt that this will mark the start of a strong and sustained recovery."
Business surveys suggest that the euro-zone economy has continued to gather momentum in the third quarter. But with unemployment rates still high, banking lending to businesses continuing to fall, and governments still trying to narrow budget deficits—albeit at a slower pace—any recovery is likely to be modest.
"Conditions remain far from easy for euro-zone manufacturers with domestic demand still constrained by strong headwinds in a number of countries," said Howard Archer, an economist at IHS Global Insight. "Global growth is currently limited, which is constraining the upside for euro-zone exports."
However difficult the road ahead may prove to be, indications that the euro zone's economy has returned to growth have already boosted sentiment, with recent surveys detecting a decline in pessimism among consumers and businesses.
A survey released Tuesday by the Center for European Economic Research, or ZEW, found that among financial analysts and institutional investors, optimism about Germany's economic prospects picked increased significantly in July.
According to the Eurostat figures, the June increase was driven by Germany, where output rose by 2.5% from May. By contrast, output in France—the currency area's second-largest member—fell by 1.5%.
Output rose in Italy, Greece and Ireland, but fell in Spain and Portugal.
By sector, the rise in output was driven by durable consumer goods, production of which increased by 4.9% from May. But there was also a significant, 2.5% increase in the output of capital goods.
The euro zone's return to growth makes it unlikely that the European Central Bank will provide additional stimulus in the months to come, even though the annual rate of inflation remains below its target of just below 2.0%.
Figures released by Germany and Spain on Tuesday confirmed earlier estimates, in turn suggesting that the final figure for the euro zone to be released Friday will be left unrevised at 1.6%.
