Euro zone industrial production dips

BRUSSELS: Industrial output in the 19 countries sharing the euro fell by more than expected in June, as activity in the currency bloc's main economies of Germany, France and Italy fell markedly.

The European Union's statistics office Eurostat said industrial production in euro zone fell by 0.4 percent month-on-month in June, but was still 1.2 percent higher year-on-year. This was below analysts' expectations of a 0.2 percent fall. The agency upwardly revised its reading for May to a 0.2 percent decline from a fall of 0.4 percent previously penciled in. The slowdown in June was most pronounced in the euro zone's main economies Germany, France and Italy, while the rate of decline slowed in Ireland and Greece. In Finland, the Netherlands, Slovakia and Spain industrial production in June was stronger than in May.

While services are the largest contributor to growth in the euro zone, industrial production is very important because of its large indirect impact on other sectors. The largest fall in output came for factories in the durable consumer goods and capital goods sector. Energy recovered from a series to falls in previous months to become the most improved sector. First estimates of economic growth in the euro zone are due on Friday, with analysts on average expecting growth of 0.4 percent quarter on quarter, according to Reuters data.