Business

Eurozone industrial production falls back in March

Porsche factory
Image caption German industry has been doing better than its counterparts in southern Europe

Industrial production in the eurozone fell by 0.3% in March, figures have shown, fuelling concerns that the bloc has returned to recession.

The main factor behind the monthly fall was an 8.5% fall in energy production.

On an annual basis, production dropped by 2.2%, Eurostat said.

On Tuesday, the statistics agency will release its first estimate for eurozone GDP between January and March, with many economists expecting a second consecutive quarter of negative growth.

Industrial production in the Netherlands fell by 9% in March from February, compared with an 11% rise in the previous month.

Spanish production fell by 1.8%, while that in Greece contracted by 1%. Production in Germany rose by 1.3%.

The sharp fall in energy production reflected warmer weather following a colder February.

Contraction

"It is evident that eurozone manufacturers are currently finding life very difficult amid challenging conditions," said Howard Archer at IHS Global Insight.

"Domestic demand is being handicapped by tighter fiscal policy in many eurozone countries, still squeezed consumer purchasing power, and rising unemployment."

Eurozone governments have introduced wide-ranging austerity measures in order to reduce debt levels, and these have undermined economic growth.

The eurozone economy contracted by 0.3% in the final quarter of last year, and analysts said Tuesday's GDP figure could mark a return to recession.

"March's fall in eurozone industrial production is a timely reminder that first-quarter GDP, due out tomorrow, will likely show a contraction," said Martin Van Vliet at ING.

Related Internet links

The BBC is not responsible for the content of external Internet sites