Euro-Area Industrial Production Plunges Most in 18 Monthsby
February's 0.8% drop in part reverses 1.9% jump in January
Weaker PMI surveys indicate more weakness may be ahead
Euro-area industrial production fell the most in 18 months in February, giving up some of the surge seen at the start of the year.
Data from Eurostat showed output declined 0.8 percent, more than the 0.7 percent economists had forecast in a Bloomberg survey. The decline followed a revised 1.9 percent jump in January, which was the biggest since 2010.
While the latest drop is partly technical, surveys and confidence indicators suggest there may be more weakness ahead. Markit’s manufacturing Purchasing Mangers’ Indexes have slipped in recent months and economic confidence in the 19-nation euro region has fallen to the lowest in more than a year.
Economists at Barclays correctly forecast the February production reading. In a note before the data were published, they said this would bring the first-quarter carryover to 1.1 percent, well above the 0.4 percent industrial growth in the last three months of 2015.
“Nonetheless, recent business surveys point to further weakness in March, as forward-looking indicators continued to nose dive, amid challenging external demand,” economists including Philippe Gudin in Paris said earlier on Wednesday.