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Euro zone industrial output drops more than expected in May

Euro zone industrial output drops more than expected in May
Euro zone industrial output drops more than expected in May   -   Copyright  Thomson Reuters 2021
By Reuters

BRUSSELS – Euro zone industrial production fell in May by more than expected, driven down mostly by a drop in the output of non-durable consumer goods such as food and clothes, data released on Wednesday showed.

The European Union’s statistics office Eurostat said industrial output in the 19 countries sharing the euro fell 1.0% month-on-month, whereas economists polled by Reuters had expected a 0.2% decline.

Year-on-year, production massively increased as the economy recovers from the worst phase of the COVID-19 pandemic in 2020. However, the surge of 20.5% was lower than the average forecast by economists in a Reuters poll of 22.2%.

The pace of the recovery also slowed down after the 39.4% increase of output in April from a year earlier.

The biggest fall in May from April was of non-durable consumer goods, for which output dropped by 2.3%, its first decline this year and its steepest decrease since April 2020.

Production also dropped 1.6% for capital goods, such as machinery, which may indicate lower output in the future.

Energy production was down by 1.9% on the month, while output of durable consumer goods, such as cars or fridges, rose by 1.6%.

The month-on-month fall in May was compounded by a downward revision of production data for April, when output increased 0.6%, instead of the 0.8% that Eurostat had estimated last month.

Euro zone production had also risen month-on-month in March, by 0.5%, but declined by 1.3% in February, Eurostat data showed.