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Euro zone industry plunges in May

Wednesday, July 13, 2016 - 01:47

Euro zone industrial production plunged by more than expected in May, depressed mostly by a steep fall in energy output. As David Pollard reports, the EU statistics suggest the bloc's economy lost steam after strong output data in April.

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The robots are futuristic, but the numbers right now show euro zone industrial growth in is anything but automatic. Output dropped in May by 1.2 per cent - pushed down by a steep fall in energy output and capital goods, such as machinery. And though nobody is saying Brexit is entirely to blame, it's a worry penetrating the minds of economists. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "We've already seen a cut in the forecast for growth by the International Monetary Fund, assuming a 'good' Brexit - one that sort of doesn't destabilise things too much - to 1.4 per cent. That's hardly sufficient to anything on unemployment and of course there are all these other issues that Europe has to face." Like low inflation. Spanish consumer prices fell 0.8 per cent on the year in June - France's have been revised down to show a tiny 0.1 per cent rise on the month. Coming just after the European Commission also cut its growth outlook, it's still another worry for the ECB. As could be news on Tuesday that EU finance ministers are endorsing a deficit sanctions procedure for Madrid and Lisbon. It could pave the way for fines within weeks. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "Spain perhaps can afford it more but Portugal is not growing particularly fast ... There has to a rethink on how those rules apply, and particularly the smaller countries should not to have this what for is quite a substantial fine imposed. It makes no sense and makes people very eurosceptic." And perhaps with that in mind, European Commissioner Pierre Moscovici has since suggested the fines could be set at zero - if Madrid and Lisbon provide clear guarantees on how they'll bring their deficits down.

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Euro zone industry plunges in May

Wednesday, July 13, 2016 - 01:47