Eurozone Industrial Production Unexpectedly Falls On Energy Output
May 12 2017 - 03:41AM
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Eurozone industrial production dropped for a second straight
month in March, defying expectations for a modest gain, as mild
weather dampened energy output.
Industrial output slid unexpectedly by 0.1 percent
month-on-month in March, the same pace of decline as seen in
February, figures from Eurostat showed Friday.
Production was forecast to climb 0.3 percent.
All components of industrial production expanded in March,
except energy output. Non-durable consumer goods and durable goods
output grew 2.1 percent and 0.9 percent, respectively.
Similarly, production of intermediate goods rose 0.3 percent and
capital goods by 0.2 percent. Meanwhile, energy output declined 3.2
percent in March.
On a yearly basis, growth in industrial production improved to
1.9 percent in March from 1.4 percent in February. This was the
fastest growth in three months, but slower than the expected 2.3
percent.
Looking ahead, surveys suggest that annual industrial production
growth will accelerate in the coming months, to as high as 5
percent, Stephen Brown, an economist at Capital Economics,
said.
The economist expects industry's weakness in the first quarter
to be reversed in the second quarter. Indeed, a strong performance
from the sector is forecast to contribute to a pick-up in GDP
growth to 2.0 percent in 2017 from last year's 1.7 percent, Brown
added.
While industrial output was disappointing in the first quarter,
growth was still 0.5 percent sequentially, indicating that growth
will likely remain robust in the current quarter, Bert Colijn at
ING DiBa, said.
In its Spring Forecast, the European Union executive raised the
Eurozone growth forecast for this year to 1.7 percent from 1.6
percent. The prediction for 2018 was retained at 1.8 percent.
In the EU 28, industrial production remained flat month-on-month
for the second consecutive month in March.
Among member states, the largest monthly decreases in industrial
production were registered in Lithuania, Greece and the
Netherlands. Meanwhile, the biggest increase was reported by
Romania.
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