Industrial production in the euro area more than expected in July amid widespread weakness in activity, raising fears that the recovery in the second quarter, which marked the end of the protracted recession, may not continue in the next three months.
Industrial output fell 1.5 percent in July from the prior month, marking a sharp deterioration in June revised 0.6 percent growth, a report by the Statistical Bureau of statistics showed Thursday. Economists had expected a more modest decline of 0.2 percent, after gaining 0.4 percent registered in June.
Reflecting the decline in output, widespread weakness across all industrial subsectors, with capital goods recorded falls of more than 2.6 percent, followed by durable consumer goods contracted 2.2 percent.
Decreased production of energy products and intermediate goods 1.6 per cent and 0.7 per cent respectively. The production of consumer non-durables fell 0.9 per cent.
The largest declines were recorded among the Member States, Ireland, Malta, Portugal, Greece and Germany, the largest increases in Lithuania, Denmark, Estonia and Finland.
On an annual basis, the decline in industrial production deepened by 2.1 per cent from 0.4 percent in June, which was revised down from an increase of 0.3 percent. And expectations were reduced 0.2 percent in July.
In the EU, industrial output decreased 1 percent sequentially in July, after rising 0.6 percent the previous month. Every year, production dropped 1.7 percent after remaining flat in June.
Archer IHS global insight, "Howard said over a relapse in July means that it will need generous increases in industrial production in August and September, if the output should be positive in the third quarter.
Looking ahead, the manufacturers hope to improve confidence in most of the countries of the euro zone will encourage businesses to increase investment, and also to encourage consumers to spend more, especially on durable goods, "Archer added.
Display support for the Economist, a recent study by the Sentix thought this month that investor confidence in the euro zone rose in September to the second highest level on record. Investor confidence index returned to positive territory for the first time since July, 2011.
Purchasing managers survey for August in contrast to production data last July, expansion of the manufacturing sector in the euro area at a faster pace in 26 months amid strong pick-up in new business. The expansion of the private sector as a whole, the most in more than two years with strong support from Germany.
At a meeting this month, leaving its rate policy, "European Central Bank" changed 0.5 percent for the fourth consecutive time as part of its efforts to maintain the economic recovery.
And strong recovery in domestic demand and exports the euro-zone economy out of the longest recession on record, with quarterly growth of 0.3 percent in the second quarter.
The Central Bank expects eurozone output recover slowly because of a gradual improvement in domestic demand, as well as foreign and begins to improve as the financial market into the real economy.
