- Jessica Hinds, an economists at Capital Economics
Industrial production across 19-nation Euro zone dropped more than expected in June, suggesting weak investment continued to restrain economic activity in the region. According to Eurostat, industrial output dropped by 0.4% month-over-month in June, whereas economists had expected a monthly decrease of 0.1%. In annual terms, however, the measure rose by 1.2% from June last year. While services remain the biggest contributor to growth in the currency bloc, industrial production has a large indirect influence on other sectors. The biggest decline in output came for factories in the durable consumer goods and capital goods sector. In contrast, energy rebounded from a series of drops in previous months to become the most improved sector. Factory output in June dropped in Germany, France and Italy when measured on a monthly basis, but increased 0.6% in Spain, Eurostat said. A decline of 0.2% in Greece appeared to be modest compared with May's 5.7% slump, an indication that doubts about Greece's Euro zone future was hurting economic activity.
In the meantime, first estimates of economic growth in the Euro zone are due on Friday, with economists on average expecting growth of 0.4% quarter-on-quarter.
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