Industrial output in the euro zone rose 1% in July, official data showed today, offering a rare glimmer of positive news to an economy struggling with stagnating growth and low inflation.
The increase in factory output data was a turnaround from the previous month, when an unexpected 0.3% drop in industrial activity surprised analysts.
That figure raised concern that a fragile recovery in the single currency bloc had fallen completely off track.
In July, the 1% rise from output in the previous month was fuelled by a 2.6% rise in investment goods, which include infrastructure and machinery, and a 1.2% percent lift in non-durable consumer goods, such as food and clothes.
However, production of durable goods dropped 1.2% in the month and energy related goods fell by 1.3%.
Across the 28-nation European Union, industrial output rose by 2% from the previous month, pushed higher by a sharp 4% rise in investment good output.
By country, Ireland posted the highest rise in industrial output, rising by 11.3% from output the previous month, due to a sharp rise in pharmaceutical goods output.
Denmark saw the biggest fall, down by 4.7% and Greece was off by 1.7%.
The output data provides hope that the euro zone will turn back to growth after the economy ground to halt in the second quarter this year.
But analysts warned that output still remained 10% below its pre-crisis peak and that recent survey data shows that manufacturers are finding life more challenging.
They said that this is not surprising given the tensions and sanctions between Russia and the West over the crisis in Ukraine and the slowdown in demand from some emerging market economies.
With prices dampened by low demand, inflation in the euro zone stands at very low 0.3%, which pushed the European Central Bank to unprecedented action last week, with a rate cut and a new programme to pump cash into the flagging economy.
In a separate data release today, Eurostat said that employment inthe euro zone rose 0.2% on the quarter in the three months to June after growing 0.1% in the previous two quarters.