"May's sharp drop in industrial production highlights the lackluster and bumpy nature of the eurozone recovery"
-Martin van Vliet, an economist at ING Bank
Industrial production in the Euro zone fell sharply in May, underscoring the fragile state of the region's recovery. Factory output declined 1.1% on the month in May, after the 0.7% increase in April, Eurostat said, whereas analysts had expected a 0.3% increase. There was a fall in production of intermediate goods as well as non-durable items. The energy sector was the only one to grow, showing a 3% increase after a 1.2% growth in April. The drop in manufacturing appeared to be broad-based, including not only economically troubled periphery, but also Germany, the European economic engine. While the 18-nation bloc has been growing since last year, jobless rate remains almost 12% and some economists argue that the region is still effectively in recession. The industrial production figures add to recent evidence from surveys of business sentiment that the fragile recovery is already losing steam. Industrial output in the European Union also dropped 1.1% in May following the 0.7% rise a month earlier.
The biggest decline was in Portugal, where production dropped as much as 3.6%, while Germany experienced a 1.4% decrease in factory output, the biggest drop since May 2013. France also saw its industrial production falling 1.3%, the steepest fall in production since June 2013; Italy and Spain reported a 1.2% and 0.9% fall, respectively.
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