Spanish industrial production beats forecasts in March, but economists expect slowdown

Spain's industrial production rebounded in March, led by a jump in energy output.

Total output increased by 1.2% month-on-month, according to the country's statistics office, led by 5.2% rise in energy output and a 1.9% increase in the manufacture of capital goods.

Economists had forecast a rise of 0.3%.

The previous month's increase in industrial output was revised lower by one tenth of a percentage point to -0.3%.

So-called intermediate goods production improved by 0.8% while that of consumer durables was flat.

Production of consumer non-durable goods dipped by 0.1% against the previous month.

In a comparison to a year ago, and upon seasonal and calendar adjustment, total industrial production grew by 2.8%, led by a 9.2% surge in the output of capital goods.

Total output was up by 2.1% in February of 2016 and by 3.2% in March 2015, INE said in a statement.

"Industrial production remains on a downward trend. It rose 0.1% q/q in Q1, down from 0.6% in Q3-Q4 2015 and 1.5% in Q2 2015. Leading indicators, such as the manufacturing PMI, suggest production is set to slow further in Q2.

"A likely slowdown in production, together with the waning effect of oil prices on consumption, signals that GDP growth is due to soften in Q2, following a stronger-than-expected 0.8% q/q increase in Q1," said Gizem Kira, senior European economist at BNP Paribas.