- Germany, France and Italy posted disappointing data this week
- Eurostat will release region’s second GDP reading on Friday
Industrial production in the euro area ended the first quarter with a second monthly drop, weakened by falling output in consumer goods and capital goods.
Output declined 0.8 percent in March from February, the Eurostat statistics office in Luxembourg said on Thursday. The reading follows disappointing data this week from Germany, France and Italy, the region’s three biggest economies. The median estimate of economists surveyed by Bloomberg was for the figure to be unchanged. From a year earlier, production rose 0.2 percent.
The monthly drop halts a strong start to 2016 after production in January jumped the most in more than 12 years, and suggests that the euro area lost momentum toward the end of the quarter. Eurostat will release its second reading of gross domestic product for the period on Friday, after an initial estimate put expansion at 0.6 percent, its fastest in a year.
It’s “mainly noise in a moderate upward trend following the very strong January reading and a partial correction in February,” said Marco Valli, chief euro-area economist at UniCredit Bank in Milan. “As the unrounded GDP data was borderline between 0.5 and 0.6 percent, the risk of a downward revision is there, but it is very difficult to take a strong view.”
Production in non-durable consumer goods fell a monthly 1.9 percent in March, while capital goods declined 1.1 percent. Germany, France and Italy all posted industrial output figures on Tuesday that trailed economist estimates.