WRAPUP 1-Argentine factory output eases, growth stays strong

* Industrial output up 7.6 percent in July

* Economic activity up 11.1 percent in June

By Luis Andres Henao

BUENOS AIRES, Aug 20 (Reuters) - Argentine economic activity surged in June but strong industrial output that has driven expansion in Latin America's No. 3 economy showed signs of easing, official data showed on Friday.

Industrial output ARIO=ECI rose 7.6 percent in July from the same month last year, falling short of market expectations but boosted by production of cars and steel, the INDEC national statistics agency said.

The median forecast in a Reuters poll was for an 8.5 percent year-on-year increase in industrial output. [ID:nN18203495]

Argentina's economic activity AREAI=ECI rose 11.1 percent in June from the same month a year earlier, the government said, confirming the number given earlier this week by President Cristina Fernandez. [ID:nN18179828]

The increase in the monthly EMAE economic activity index outpaced a median forecast for an increase of 10.2 percent in a Reuters poll of analysts.

The economy shrank 0.6 percent in June from May.

Consumer spending and exports, especially soy after a bumper harvest, boosted growth in June.

Argentina is a leading global agricultural supplier and ranks as the world's No. 3 soy exporter and the top world supplier of soy oil and meal.

"These numbers confirm that this is a year in which the Argentine economy is growing strongly," said Miguel Kiguel, a former deputy finance secretary. "The rise of Brazil and the price of soy have been very important."

Longer-term prospects for local industry are clouded by high inflation, estimated by private economists at between 25 and 30 percent annually, and surging wage demands that eat into the local currency's competitive edge. (Additional reporting by Alexandra Ulmer, Kristina Cooke, Helen Popper and Juliana Castilla; editing by Todd Eastham)