- POSTED: 14 Jul 2014 19:21
Industrial production in the eurozone fell by 1.1 per cent in May, official Eurostat data showed on Monday, erasing a rise a month earlier.
BRUSSELS: Industrial production in the eurozone fell by 1.1 per cent in May, official Eurostat data showed on Monday, erasing a rise a month earlier.
In April, industrial production rose 0.7 per cent, and the quick turn lower will dampen hopes that a sustained recovery has taken hold in the 18-country single currency zone.
"Although the decline is likely to have been temporary, the disappointing numbers add to evidence that economic growth in the region is slowing," said Chris Williamson, chief economist at Markit.
"Business optimism and hiring intentions have cooled from the three year highs seen earlier in the year, led by darkening clouds forming over the French economic horizon in particular," he added.
The production fall in May was mainly due to a 2.4 per cent drop in intermediary goods and a 2.2 per cent fall in non-durable consumer goods.
"After a strong start to the year, some companies had probably ramped up inventories, which they are now running down before ordering more," said Christian Schulz of Berenberg Bank in Germany.
Investment energy production however rose by 3.0 per cent.
On a country basis, the fall in industrial production was strongest in Portugal, down by 3.6 per cent. In the Netherlands however, it rose by 1.1 per cent.
In France industrial production fell by 1.3 per cent, and in Germany by 1.4 per cent.
On a yearly basis, eurozone industrial production rose by a weak 0.5 per cent, while across the entire 28-member European Union it gained 1.1 per cent.