Eurozone factories suffer record output slump: EU

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

Factories and refiners in the 16 countries using the euro cut their output at the fastest rate on record in April in the face of depressed demand, according to official EU figures on Friday.

The Eurostat data agency said eurozone industrial production fell 1.9 percent in April over one month, bringing the drop over 12 months to a record 21.6 percent, the sharpest annual contraction on record.

The drop was steeper than economists forecasts for a production slump of 0.6 percent in April over one month and 20.1 percent over one year.

"The April industrial production data for the eurozone are very disappointing and raise concern that the region is lagging in terms of signs of recession easing," said economist Howard Archer at IHS Global Insight.

The decline also marked a deterioration from March when production had fallen 1.4 percent over one month and 19.3 percent over 12 months.

European factories have slashed their output and cut jobs in recent months as companies reduce orders and try to sell off excess inventories in the face of a global demand slump.

"April?s eurozone industrial production figures provide few signs that the negative effects from destocking and the collapse in global trade are waning," said Ben May at consultants Capital Economics.

In the broader 27-nation European Union, industrial production also suffered steep declines, falling 0.9 percent in April over one month and 19.3 percent over one year.

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