Spain’s industrial production plunges in May, below market expectations

Industrial production in Spain plunged during the month of May, remaining well below market expectations, as a drop in the production of capital goods and non-durable consumer goods weighed on overall output.

Production fell 0.5 percent m/m, witnessing the second straight monthly drop in a row, after April’s figures were revised down to a 0.1 percent decline. The country’s manufacturing sector has been struggling in contrast with a stronger services sector. Market had expected industrial production to fall 1.8 percent on a monthly basis.

However, industrial output rose 1 percent y/y on a seasonally adjusted basis in May, a slowdown in growth from the previous month’s 2.6 percent rise and lower than the 2.2 percent boost expected by economists.

Moreover, the Spanish Economy Minister Luis de Guindos, struck a confident note over the economic growth of the country, despite gloomy industrial data of late, saying it is growing faster than expected and may expand more than 3.2 percent this year. This would exceed the current official prediction of 2.7 percent growth in 2016, he added.

Meanwhile, the general election that took place in Spain last month led to a majority victory for Prime Minister Mariano Rajoy and 'The People's' party.