* Industrial output up on intermediate, non-durable goods
* Situation in southern periphery continues to improve
* Output in France drops y/y, inches up in Italy y/y
By Martin Santa
BRUSSELS, April 14 Output at the euro zone's factories rose broadly in line with expectations in February driven by production of intermediate and non-durable goods, data from the EU's statistics office Eurostat showed on Monday.
Industrial output in 18 countries using the single currency rose in line with market expectations by 0.2 percent on the month, after a revised January figure showed a flat reading, Eurostat data showed.
When compared with the same period last year, industrial output increased by 1.7 percent in February, slightly above expectations of analysts polled by Reuters who saw a 1.5 percent rise, after a downwardly revised 1.6 percent growth in January.
The monthly rise was driven by a 0.6 percent growth in production of intermediate goods while output of non-durable consumer goods was up by 0.5 percent, Eurostat said.
Capital goods' output in the bloc remained stable in the second month of the year, with production of durable consumer goods falling by 1.2 percent on the month and the highly volatile production of energy down by 1.7 percent.
The situation in the euro zone's southern countries, imposing austerity measures and wide-reaching structural reforms aimed to clean up public finances and restore sustainable growth paths, continued to improve in February.
When compared with the same period of the last year industrial production in Portugal rose by 4.1 percent, 3.2 percent in Spain and Greece, which successfully returned to bonds markets last week for the first time since 2010, saw production up by 1.4 percent.
Europe's strongest economy, Germany, reported a 4 percent rise on the year in February, after a 4.1 percent jump a month earlier.
The picture in Italy and France, where tens of thousands of people took part in protests in central Paris and Rome on Saturday against government economic reform plans and austerity measures, was mixed in February.
Output at factory gates in Italy was up by 0.4 percent on the year, slowing from a 1.2 percent increase in January, while the bloc's second largest economy France saw industrial production down 1 percent after a 1.2 percent drop in January.
The euro zone economy is, based on the European Commission's latest forecast, expected to return to growth this year with a 1.2 percent rise after a 0.4 percent contraction in 2013 and accelerate to 1.8 percent in the next year.
The European Central Bank said in April, after keeping interest rates on hold at record lows, that the bloc's moderate recovery was proceeding in line with previous assessment, and positive contribution from domestic demand was rising. (Editing by Louise Ireland)