Euro zone industry output recovers

15 July, 2020 12:00 AM printer

BRUSSELS: Euro zone industrial production rose in May, official estimates showed on Tuesday, but the recovery from lockdown-induced record declines March and April was lower than expected and far from offsetting past drops.

Manufacturing output in the region rose by 12.4per cent in May from April, mostly driven by a surge in production of durable consumer goods, such as cars or fridges, the European Union statistics office Eurostat said, report agencies.

But the increase was significantly lower than the 15per cent rise expected by economists polled by Reuters.

It was also much less pronounced than the 18.2per cent decline in April, which had followed a 11.8per cent drop in March, as factories were forced to shut or reduce activity at the peak of the coronavirus outbreak in Europe.

The limited rebound in May, when many plants reopened, suggest the recovery is limited. The fall in April was also bigger than initially estimated by Eurostat, which on Tuesday revised its month-on-month data to -18.2per cent from -17.1per cent.

Compared with a year earlier, industrial production was down by 20.9per cent, worse than market expectations of 20.0per cent but better Aprils 28.7per cent drop.

The rebound from April concerned all economic sectors surveyed by Eurostat. It was mainly driven by a 54.2per cent leap in the production of durable consumer goods, which nearly offset big falls in the previous two months.

Factories also increased by 25.4per cent their output of capital goods, such as machinery, in a sign of confidence in long-term economic growth. The increase was, however, lower than the 26.1per cent fall in April.

Among the largest euro zone states, Italy’s recovery was the most impressive, with plants ramping up production in May by 42.1per cent compared with April, after the country suffered the bloc’s worst fall in activity in the two previous months combined.