Eurozone Industrial Output Slumps in April

The production of capital goods fell by 2.6%, with the largest drops across the board logged in industrial powerhouses Poland (6.5%) and Germany (2%).

Eurozone industrial production slumped in April, showing a sharply accelerating contraction compared with March, official figures showed on Wednesday.

Output fell by 0.8% after a less-than-initially-thought 0.1% drop the previous month, according to the Eurostat data agency.

The production of capital goods fell by 2.6%, with the largest drops across the board logged in industrial powerhouses Poland (6.5%) and Germany (2%).

While the fall was "not quite as big as we or the consensus had feared," according to London-based analysts Capital Economics, "it was still the seventh fall in the last eight months and left production some 2.3% lower than a year ago."

The firm's chief economist Jonathan Loynes said that the figures served as "another reminder that more bailouts for governments and support packages for banks will do little to address the fundamental macroeconomic challenges facing the currency union."

Tipping a sharp contraction in gross domestic product for the second quarter of the year, Howard Archer of IHS Global Insight, also in London, said the data only underscores "dire manufacturing survey evidence for May from the purchasing managers."

He said an even sharper drop was only averted by a 6.9% jump in energy production, although there was some better news, he said, in sharply falling oil prices and a weakened euro on exchange markets.

Copyright Agence France-Presse, 2012

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