Euro zone sees surprise drop in industrial production
Euro zone industrial production dropped sharply in May with the energy sector the only one to thrive, new data showed, highlighting the fragile state of the bloc's recovery.
Output in the 18 countries sharing the euro dropped 1.1pc on the month in May, following a 0.7pc rise in April, the European Union's statistics office Eurostat said. Production here also fell in the month.
Analysts surveyed by Reuters had expected a 1.2pc monthly fall across the euro zone in May.
Compared with the same period in 2013, factory gate output grew in line with market expectations by 0.5 percent after a 1.4 percent rise in April.
The month-on-month decline was led by a 2.4pc fall in production of intermediate goods - such as parts used for cars. There was a 2.2pc drop in the production of non-durable items such as food or cosmetics.
The energy sector was the only one to grow, showing a 3pc increase after 1.2pc growth in April.
Industrial production in the euro zone's three biggest economies - Germany, France and Italy - fell month-on-month. Germany saw the biggest drop since May 2013 with a 1.4pc fall.
France, with a 1.3pc decline, recorded the steepest fall in production since June 2013 and Italy's production registered its worst performance since November 2012 with a 1.2pc drop.
Germany's faltering economy has cast further doubt over the euro zone's prospects for recovery this year, with no other big country strong enough to pick up the slack.
Since late last year the €9.6 trillion economy has been climbing steadily out of a two-year recession, but any rebound is being hindered by continued austerity, joblessness and uneasy markets.
Investors will look to the July ZEW German survey on economic sentiment today to see how great the impact of the crisis in Ukraine has been on confidence in Germany.
Irish industrial production for May 2014 was 2.5pc lower than in April 2014. On an annual basis, production soared 32.3pc when compared with the previous May. (Reuters)