Another Day Another Shoe… Eurozone Production Falls in June. Steve Picarillo Expresses Concerns About the Eurozone Economy

August 13, 2014 at 20:40 PM EDT

The latest numbers paint a cloudy picture for the Eurozone economy and likely indicate that the struggling recovery has peaked and is now fizzling. We have lived through this before, but I am not sure we want to go though it again!

The shoes keep falling… Industrial production in the eurozone fell unexpectedly in June. Fears of a return to recession are spreading throughout the eurozone, as a wave of mediocre-to-poor economic data emerges. “Adding this unexpected decline in industrial production to Italy’s return to recession, the weakening GDP across the block and the declining investor confidence in Germany, further sparks worries that the economic problems in the eurozone are indeed deepening,“ commented Steve Picarilo, President of Creative Advisory Group, Inc. in a statement.In June, factory output fell by 0.3% across the 18-country block driven by 1.9% drop in nondurable goods and an 0.7% drop in energy. The fall in production for June is in stark contrast to the predictions of 0.3% growth for the month. Moreover, this is particularly worrisome after the 1.1% contraction in May. While much of the May decline was attributed to additional holidays in some countries, the production of intermediary goods and nondurable consumer goods evidenced underlying weakness. “The latest numbers paint a cloudy picture for the eurozone economy and likely indicate that the year-old recovery has peaked and is now fizzling,“ Picarillo continued. “Indeed, a flurry of new statistics indicating negative economic trends is expected in the next couple of days. The upcoming statistics will further illustrate the weak and uneven eurozone economy, with very limited growth.“

Adding to the uncertainty, the eurozone economy is still facing numerous headwinds. The ongoing deleveraging by the private sector, tight fiscal policy, restrictive credit conditions and high unemployment, will continue to restrain the pace of economic growth. Moreover, the global political uncertainties, especially the tensions in Russia, which may impact the eurozone’s oil supply, does not bode well for positive economic growth.

“As a result, it appears that interest rates in the eurozone will most likely remain very low for a prolonged period of time, if that is any consolation.“ Picarillo conclused, “And, remember uneven? Keep an eye on Ireland, which recorded the largest fall in production at 16.5% followed by the Netherlands at 3%.”

About:

Steve Picarillo is a global financial markets, risk, banking, compliance and communications executive with exceptional experience in risk analysis of global banking systems and financial institutions. Mr. Picarillo provides analysis and commentary to the financial community, the media, investors and regulators.

For additional information on Steve, please visit his website at www.stevepicarillo.com.

 The opinions in this article are the views/opinions of the author and Creative Advisory Group, Inc. (CAG), based on public information and the author’s experience. This is not a recommendation to buy, sell or trade any security, debt or any other financial instrument. The author and CAG do not hold any interest in any of entities mentioned in this posting, and have no plans of entering into any financial trade in the same in the next 72 hours.

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Source: www.abnewswire.com