Paris - AFP
Industrial production slumped across Europe in May, sparking fears that the region's fragile economic recovery may have already peaked, analysts said Thursday.
France, Italy and the Netherlands all reported a slew of poor data Thursday, joining Germany and Britain which reported falling output earlier this week.
"All were sharply below consensus and our expectations," said Christian Schulz, economist at German bank Berenberg.
French industrial production fell by 1.7 percent in May after posting slight growth the month before, while Italy's slid 1.2 percent -- its biggest fall since November 2012.
The Dutch posted a 1.9 percent drop, and German industrial output fell for the third month in a row in May, this time by 1.8 percent. Output in Britain, which is not a eurozone member, slipped by a more modest 0.7 percent.
Calendar effects played a role, as a late Easter weekend this year might have led workers to take their holidays in May, thereby reducing production.
But more crucially, the region's output was hit by external events, analysts said.
The manufacturing cycle is most sensitive to external events, and Europe has had a "cocktail of negative external effects", said Frederik Ducrozet, an economist at Credit agricole CIB.
Besides the crisis in Ukraine, a slowdown in Chinese growth and a poor first quarter in the world's economy the United States did not help.
Schulz also pointed to "geo-political uncertainty, especially the Putin effect", with the crisis in Ukraine taking its toll on investor confidence.
Other analysts warned that the greater implication for the region is that growth may once again be stalling.
"With industry looking unlikely to power faster economic growth in the euro-zone, evidence is mounting that the region’s recovery might already be peaking despite the huge amount of slack in the economy," said Jessica Hinds, economist at the Capital Economics.
"We can describe it as a scenario of aborted recovery in Europe," Olivier Passet, an analyst at French firm Xerfi said.
"We didn't sufficiently blow on the embers of the recovery because we maintained a macroeconomic stance that was too rigid," he said, referring to austerity policies in force in Europe.