Spain: Industrial production drops for a third consecutive month
July 6, 2011
In May, industrial production contracted a working-day adjusted 0.4% over the same month last year, following the revised 1.5% decrease observed in April (previously reported: -1.6% year-on-year). The reading saw industrial output drop for a third consecutive month and defied market expectations, which had output remaining unchanged from April. Weak consumer demand and rising concerns regarding the pace of the economic recovery contributed to the dismal result. The monthly drop was broad-based, as all sub-indices but manufacturing contracted over the same month the previous year in working-day adjusted terms. As a result of the monthly drop, annual average growth in industrial production eased from 0.9% in April to 0.6% in May, marking the third consecutive deceleration. The Central Bank anticipates the economy to expand 0.8% this year, and to accelerate further to 1.5% in 2012. These projections are below government expectations of a 1.3% expansion this year and growth of 2.3% in 2012.