Euro area manufacturing output in surprise June 0.6 per cent fall

The Associated Press ~ staff The News
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LONDON - Hopes that Europe's crucial manufacturing sector is on the mend have been dashed by the news Wednesday that industrial production unexpectedly fell in June.
Figures from the European Union's statistics office Eurostat showed that industrial production in the 16 countries that use the euro dropped 0.6 per cent in June from the previous month against expectations for a modest 0.3 per cent rise. June's decline offset an equivalent increase recorded in May.
The industrial production figures are an important component in the compilation of overall economic output figures for the euro zone and the surprise fall may stoke concerns that Thursday's first estimate for the scale of the contraction in second-quarter gross domestic product will be worse than anticipated.
At present, the markets are expecting a 0.5 per cent quarterly decline in euro zone output during the April-June quarter, a marked improvement on the record 2.5 per cent slump recorded in the first three months of the year.
The industrial sector is particularly important to the euro zone economy - the main reason behind the 2.5 per cent economic contraction in the first quarter was a collapse in demand for high-value manufacturing exports, such as cars and heavy machinery, from places like Germany.
Despite the monthly decline, the annual drop improved to 17 per cent from 17.6 per cent in May because last June's particularly bad 1.9 per cent decline dropped out of the comparison.
Eurostat also said that industrial production in the larger 27-country EU fell by only 0.2 per cent in June from the month before against a flat reading in May. On an annual basis, output was 15.6 per cent lower against 16.6 per cent in May.

Organizations: European Union

Geographic location: LONDON, Europe, Germany

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