Factory output across the 18 countries that use the euro slumped in August, driven by the largest decline in the manufacture of capital goods since the months following the collapse of Lehman Brothers, and possibly reflecting a similar decline in global business confidence.
The European Union’s statistics agency Tuesday said production by factories, mines and utilities during August was 1.8% lower than in July, and 1.9% lower than in the same month of 2013. That was a slightly deeper decline than economists had expected, since the median forecast of 23 surveyed by The Wall Street Journal last week was for a fall of 1.7% on the month.
The decline more than reversed a 0.9% gain in July, and suggests it is possible output for the third quarter as a whole will be lower than for the second quarter, when it grew modestly.
The eurozone economy stagnated in the three months to June, and without an expansion in industrial output, a significant pickup in the second half of the year is unlikely.