The industrial output in the 17 countries that share the euro posted a small contraction at the end of the first quarter as the stronger euro and surging energy costs weighed on growth, according to The Wall Street Journal. On Thursday, the European Union reported that industrial output in the eurozone dropped 0.2% in March from the previous month, marking the first monthly decline in six months. The monthly change brought growth in manufacturing to 5.3% year-over-year, which is the weakest annual gain in 13 months.
Ken Wattret of BNP Paribas said, “We’re probably in a period where manufacturing sector activity is moderating.” The economist stressed that it was not a major collapse, but he did forecast that “it may look in the next couple months as if the picture has weakened dramatically.” Industrial output was 1% higher quarter-on-quarter during the first three months of the year, slowing from a 1.8% quarterly increase in the fourth quarter of 2010, according to ING’s Martin van Vliet. Manufacturing output was down across the region, mixed fairly evenly among leading economies and debt-burdened peripheral countries.
