Eurozone industrial output up 0.6% in May

Eurozone industrial production rose a sharp 0.6 percent in May after contracting 1.1 percent the previous month, official figures showed Thursday, but analysts were sceptical of an upturn in growth. The Eurostat data agency showed a surprise increase following a 1.7 percent rise in non-durable consumer goods in the euro zone. But "May's increase in euro-zone industrial production does not alter out view that the sector will continue to act as a drag on overall GDP growth," said Ben May of Capital Economics. Though stronger than expected, the increase was only the second monthly hike in nine months and only partly reversed the strong fall in April. "Production in all the major sectors remained much lower than a year earlier," he added. Economist Howard Archer of IHS Global Insight likewise forecast more difficulties ahead. "Despite May's rise in production, it is evident that Eurozone manufacturers are still finding life very difficult amid hugely challenging conditions," he said. "Domestic demand is being handicapped by tighter fiscal policy in many Eurozone countries, limited consumer purchasing power and rising unemployment." Eurostat a rise in capital goods by 0.9 percent, durable consumer goods by 0.5 percent and intermediate goods by 0.3 percent. The increases were offset by a 2.3 percent drop in energy output in the 17-nation euro area. Among member states for which data was available, the highest increases were seen in Portugal, with a 4.1 percent hike, Sweden, up 2.0 percent, Latvia with 1.9 percent, and Germany with a 1.5 percent increase. Largest decreases were Lithuania, down 16.3 percent, Slovenia, 3.2 percent, France down 2.1 percent and the Netherlands, 1.6 percent. Across the 27 European Union nations, industrial output grew 0.5 percent in May compared with a 0.7 percent drop the previous month.