Eurozone GDP Rises 0.1% As Estimated

(RTTNews) - The euro area economy grew at a marginal pace in the second quarter as initially estimated, and companies generated jobs modestly, official data showed on Thursday. Another data from Eurostat showed that industrial production remained weak in the second quarter as the positive impact from frontloading of orders from the US faded.

Gross domestic product grew 0.1 percent sequentially, after rising 0.6 percent in the first quarter, flash estimates from Eurostat showed. The figures matched the estimate released on July 30.

On a yearly basis, economic growth slowed to 1.4 percent, in line with estimate, from 1.5 percent in the prior quarter.

The EU27 GDP grew 0.2 percent from the previous quarter and expanded 1.5 percent from the prior year.

Further, data showed that the number of employed persons increased 0.1 percent, which was weaker than the 0.2 percent rise in the first quarter. Year-on-year, growth in employment held steady at 0.7 percent.

Industrial output fell 1.3 percent in June from May, when output was up 1.1 percent, Eurostat reported. All components of production, except energy contracted in June.

Production of non-durable consumer goods showed the biggest fall of 4.7 percent, followed by a 2.2 percent drop in capital goods output.

Output of durable consumer goods and intermediate goods fell 0.6 percent and 0.2 percent, respectively. Meanwhile, energy output increased 2.9 percent in June.

The annual growth in industrial production eased sharply to 0.2 percent in June from 3.1 percent in May.

Industrial production in the EU27 fell 1.0 percent month-on-month in June but increased 0.5 percent from the last year.

Among member states, the largest monthly decreases were registered in Ireland, Portugal and Lithuania. Meanwhile, the highest increases were seen in Belgium, France and Sweden. ING economist Carsten Brzeski said a sharp plunge in industrial production data suggests that the initial signs of an inventory cycle turn were mainly driven by US frontloading rather than a genuine cyclical recovery.

"While tariffs and the stronger euro will continue to weigh on the manufacturing sector, the gradual cyclical turning of the inventory cycle as well as the structural shift towards defence should support growth ahead," the economist added.

Brzeski concluded that the hoped-for industrial recovery seems to be delayed once again.