Eurozone Industrial Output Falls More Than Expected in May
Euro zone industrial output fell more than expected in May as energy output and the production of big-ticket industrial equipment declined.
Data from Eurostat, the EU's statistics arm, showed output fell by 1.2% from April, below the 0.8% decline penciled in by analysts. Eurostat said output rose 0.5% on the year, below the 1.3% gain expected. In the report on Wednesday, Eurostat also revised upwards the month-on-month growth rate in April to 1.4% from 1.2%. Year-on-year that month, output rose by 2.2%.
"May's sharp fall in euro zone industrial production reversed almost all of April's strong gain and suggests that industry will probably detract from euro-zone GDP growth in Q2," noted Capital Economics analysts.
Energy output fell by 4.3% in May; capital goods production declined by 2.3% and durable consumer goods production declined by 0.7%. Non-durable consumer goods fell by 0.1%, potentially tempering policymakers' expectations that consumers in the leading euro zone economies of Germany and France will step into the breach left by stuttering exports.
Among euro zone countries for which data was available, the Netherlands posted the steepest monthly decline in industrial output, of 7.8%, followed by Portugal, 4.4%, and Greece, 4.3%.
Capital Economists noted that the steep drop in the Netherlands was triggered by the plunge in energy output and could prove temporary.
But it said "the general weakness seen in today's release clearly shows that euro-zone industry is struggling to gain traction."
Growth in the euro zone economy is widely expected to have slowed in the second quarter from 0.6% in the first quarter.
The figures come after France's statistics office confirmed that the June inflation rate in France rose to 0.2%, after prices stagnated in May. Monthly price growth slowed to 0.1% from 0.4%. The EU-harmonized inflation measure rose to 0.3% from 0.1%.
European stock benchmarks were marginally higher on Wednesday morning after the data, with the Eurostoxx 50 up 0.09% at 2,936.19.