Euro-Zone Industrial Output Slumped in May Industrial production in the 18-member euro zone declined sharply in May, another sign that the currency areas economic recovery remains weak. The European Unions statistics agency Monday said output from factories, mines and utilities fell by 1.1% from April, although it was up 0.5% from May 2013. That was the largest month-to-month drop since September 2012. Industrial production figures can be very changeable from month to month, and the May decline doesnt necessarily signal a turning point for the sector. But it comes as economic data and business surveys show little indication of a hoped-for pickup in the economy during 2014. The euro zones economy has struggled to grow in the years since the 2008 financial crisis, and in particular has lagged behind other parts of the world economy since its interlinked government debt and banking crises erupted in late 2009. But with the worst of those crises appearing to have passed last year, policy makers had hoped for a gradual acceleration in the rate of growth as 2014 advanced. Instead, the first quarter marked a slowdown from the final three months of 2013, and hopes for a significant rebound in the second quarter are fading with every data release. The European Central Bank responded to weakening growth prospects and too-low inflation by announcing a package of measures on June 5 that included interest rate cuts and cheap, medium-term funding for banks that is intended to be passed on to businesses. However, a survey carried out on behalf of the European Commission found that those measures inspired little fresh optimism among businesses and households about the single-currency areas economic prospects. Germany warned Thursday that its economic growth rate slowed in the second quarter because of Ukraine-Russia conflict. The decline in industrial output during May was broad based. While energy companies reported an increase in output, manufacturers of capital and consumer goods reported declines. The drop also affected most members of the euro zone, with the Netherlands being alone among the larger economies in recording an increase in production.
Posted on: Mon, 14 Jul 2014 09:27:41 +0000
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