Industrial slowdown for Europe could drag on bloc’s expansion

THE EUROZONE’S industry suffered in May, with a widespread decline in output confirmed yesterday, adding to concerns that the bloc’s feeble recovery is already beginning to slow down.

Output fell by 1.1 per cent between April and May, according to official statistics. The slump means that production increased by only 0.5 per cent year-on-year.

Portuguese firms saw the sharpest drop in output, with a fall of 3.6 per cent from April. All four of the largest economies in the currency union also recorded a decline during the month.

The drop was broad-based by sector too, with only energy recording a month-on-month increase in production.

“The sharp fall in Eurozone industrial production in May suggests that the recovery in the sector is flagging before it has even really begun, boding ill for the region’s overall economic recovery,” said Jessica Hinds of Capital Economics.

But Chris Williamson, chief economist at Markit, said public holidays in May could be partly to blame: “Such extra holidays are notoriously difficult to fully account for when seasonal adjusting economic data.”