Bloomberg News

Spain February Industry Output Drops as Six-Year Slump Persists

April 10, 2013

Spanish industrial output declined more than economists expected in February as Prime Minister Mariano Rajoy struggles to haul the economy out of a six-year slump.

Production at factories, refineries and mines adjusted for the number of working days fell 6.5 percent from a year earlier, after declining a revised 4.9 percent in January, the National Statistics Institute in Madrid said in an e-mailed statement today. That compared with the median estimate of a 4.9 percent drop in a Bloomberg News survey of eight economists.

Prime Minister Mariano Rajoy is seeking more time from European Union peers to cut the second-largest budget deficit in the euro region, as large as Greece’s as a portion of gross domestic product. His government is concerned Spain’s recession may further worsen after it stepped up the toughest austerity measures in its democratic history last year.

Spanish new car registrations in Spain, the euro area’s fourth-biggest economy, fell 13.9 percent last month from a year ago. Modeled after the cash-for-clunkers program that lifted U.S. auto sales in 2009, initiatives offering discounts of 2,000 euros ($2,616) on a new car for drivers junking old wheels has failed to reboot demand. About 700,000 vehicles were sold in Spain last year, less than half the 2005 peak, according to LMC Automotive.

Economy Minister Luis de Guindos yesterday estimated output shrank between 0.5 percent and 0.6 percent in the first quarter, narrowing from the 0.8 percent drop in the previous three months. The Bank of Spain sees the economy stabilizing in the second half even as it maintains a forecast of a 1.5 percent contraction for the full year.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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