Berlin - Industrial production in the eurozone rebounded in July, raising hopes that the 18-member currency bloc has regained momentum after stagnating in the quarter ending in June, data released on Friday showed.
Output grew by a more-than-forecast 1% from June, when it contracted by 0.3%, the European Union statistics office Eurostat said.
"The eurozone industrial sector has started the third quarter on a positive note," said ING Bank economist Martin van Vliet.
The July increase brought to an end two consecutive monthly falls. Analysts surveyed by dpa-AFX had expected a 0.7% gain in July.
Leading the month's rise in output was a solid pickup in both Germany and Portugal. Output surged 11.3% in Ireland.
There was also encouraging news from France's ailing economy, where production increased for the second month in a row.
Those gains helped to offset a sharp drop in output in Italy, which fell month-on-month by 1% in July, far more than the 0.2% economists expected.
"The context Italy is facing is one of rising geopolitical tensions, which are affecting firms' sentiment, and slowing foreign demand," said Chiara Corsa, an economist from Italy's UniCredit bank.
"This makes the road to the recovery certainly bumpier than previously expected," she added.
Italy faces the worst economic slump in its postwar history, with the nation's gross domestic product having contracted in 11 of the last 12 quarters.
Despite the bleak outlook, Economy Minister Pier Carlo Padoan said the government would still meet EU deficit targets.
"The macroeconomic picture today is much worse than six months ago, and there is an obvious, mechanical implication for public accounts, but we will meet the commitments anyway," he said before a meeting with his eurozone counterparts in Milan.
Industrial production in the eurozone was 2.2% higher in July when compared with the same month last year.
There was also hopeful signs from the eurozone's weak jobs market.
Despite the fragile state of the currency bloc economy, employment edged up by 0.2% in the second quarter, compared with only a 0.1% increase in the three months ending in March.
Industrial production in the 28-member European Union grew month on month by 0.7% in July and by 2% year on year, Eurostat said.