Industrial production falls back in March

Industrial production in the eurozone fell by 0.2 per cent in March compared to February, according to the latest statistics released by Eurostat.

In the EU as a whole production fell by 0.3 per cent. The figures follow increases of 0.6 per cent and 0.4 per cent respectively last month.

Chief European and UK economist at IHS Global Insight, Howard Archer said: "Overall industrial production in March was dragged down by falls in output of capital goods and non-durable consumer goods. Energy output also fell appreciably.

"Eurozone manufacturers started off the second quarter pretty well and their outlook has been boosted by the recent marked falling back in oil and commodity prices, as well as the appreciable retreat in the euro from its early May 17-month high above US$1.49.

"Nevertheless, there are some clouds on the horizon for Eurozone manufacturers. Inventory corrections may well be generally drawing to a close across the region, while domestic demand is likely to be increasingly limited in a number of Eurozone countries by tighter fiscal policy increasingly kicking."

He added that supply disruptions in Japan following the earthquake and tsunami could affect the automobile and consumer electronics sectors.

Industrial production fell in 11 EU countries and rose in nine in March. The steepest declines were 4.6 per cent Lithuania, 1.7 per cent in Denmark and 1.1 per cent in Finland. Estonia increased its production by 2.8 per cent, Slovenia by 2.2 per cent and Luxembourg by 1.9 per cent.

Over the year to March, industrial production increased by 5.3 per cent in the eurozone and 4.6 per cent in the EU27. Greece suffered the biggest fall, of 7.5 per cent. Estonia registered the biggest increase in the annual figures as well as month-by-month, of 32.7 per cent – followed by Lithuania, 14.5 per cent and Sweden, 13.5 per cent.