Eurozone industrial production unexpectedly drops in March

Eurozone industrial production unexpectedly fell in March, according to the latest figures from Eurostat.

Industrial production was down 0.1% from February, missing analysts' expectations for a 0.3% rise. However, the February drop was revised to 0.1% from 0.3%.

Energy production fell 3.2%, while the production of capital goods was up 0.2% and intermediate goods increased by 0.3%. The production of durable consumer goods and non-durable consumer goods rose 0.9% and 2.1%, respectively.

Compared with March 2016, eurozone industrial production was up 1.9%, undershooting expectations of 2.3% growth. The production of durable consumer goods was up 4.1%, intermediate goods rose 3.2% and capital goods production was 2.7% higher. The production of non-durable consumer goods ticked up 1.7%, while production of energy fell by 4.8%.

In the EU-28 group of nations, industrial production was stable on the month in March and up 2.4% on the year.

Capital Economics said: "March’s small fall in euro-zone industrial production confirms that the sector had a weak Q1, but the industrial surveys point to stronger growth to come.

"That said, the weak outturn in Q1 was mainly due to unseasonably warm weather, which weighed on energy production."

Pantheon Macroeconomics said: "A poor headline, but the upward revision of the February data was a silver lining. The revised data show that industrial production was flat in Q1, following a 1.0% jump in Q4. But this relatively poor headline tells a misleadingly poor story on the economy. Construction, which is reported separately by Eurostat, rose strongly and weakness in manufacturing production was partly due to warm weather depressing utilities. In addition, plant maintenance in France depressed oil refining. By contrast, the advance Q1 GDP data suggest that manufacturing investment was much stronger."