Euro zone Feb industry output falls, largely due to energy

BRUSSELS (Reuters) - Euro zone industrial output declined in February, against market expectations of a slight increase, largely due a sharp drop of energy production, dampening prospects for robust economic growth after bullish sentiment indicators.

The European Union's statistics office Eurostat said on Tuesday that industrial production in the 19-country single currency bloc fell by 0.3 percent from January, but rose by 1.2 percent year-on-year.

Both figures were lower than market expectations of increases of 0.1 percent in the month and of 2.0 percent from a year earlier.

January's output numbers were also cut to 0.3 percent month-on-month from an initially reported 0.9 percent and to 0.2 percent year-on-year from the 0.6 percent published a month ago.

The tepid production numbers contrast with bullish sentiment indicators.

According to the Markit purchasing manager index, regarded as a good guide to growth, euro zone businesses enjoyed their best quarter in six years at the start of 2017.

Investor sentiment in the euro zone improved more than expected in April to remain at the highest level in almost 10 years, data from the Frankfurt-based Sentix research group said on Monday.

The February output decrease was largely due to a 4.7 percent decline in energy production, perhaps reflecting mild weather, along with a 1.1 percent fall in output of non-durable consumer goods, a wide category including fresh vegetables and clothing.

Output of intermediate goods went up by 1.0 percent and of capital goods, such as machinery, by 0.9 percent. Durable consumer goods production was flat.

At national level, industrial production in Germany, the bloc's largest economy, grew by 0.8 percent, and in Italy by 1.0 percent. However, it fell in France and Spain, by 1.6 and 0.3 percent respectively.

(Reporting By Philip Blenkinsop; editing by Robert-Jan Bartunek)

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