European industrial production fell unexpectedly in June, suggesting the region’s economy may struggle to emerge from the recession.
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Output in the 16-nation euro area dropped 0.6% from May, led by a 4.2% decline in production of durable consumer goods according to data from the European Union’s statistics office in Luxembourg.
A survey of economists by Bloomberg had predicted a gain of 0.3%. Output was down 17% from June last year.
The 4.2% drop in June production of durable goods such as washing machines followed a 1.8% decrease in the prior month, today’s report showed. Output of capital goods such as factory machinery fell 0.3% from May, when it rose 1%t. Overall output increased 0.6% in May, more than the 0.5% estimated earlier, the statistics office said.
The euro-area economy probably shrank 0.5% in the second quarter from the previous three months, which saw a contraction of 2.5%, according to a Bloomberg survey of economists. The statistics office is scheduled to release the report on gross domestic product later this week.
Automotive market analysts are growing concerned about the outlook for car sales in Europe when temporary scrappage incentives are removed in 2010. An adverse ‘payback’ effect on sales next year would be counteracted by strong economic growth.
