(Recasts with economists comments)
By Jan Strupczewski
BRUSSELS, June 12 (Reuters) - Euro zone industrial production shrank by more than a fifth in April compared with a year earlier -- a new record -- data showed on Friday, raising risks that the second quarter will be weaker than expected.
Production fell 21.6 percent in the 16-country area, the European Union's statistics office said, exceeding the previous year-on-year record decline of 19.3 percent logged in March and economists' expectations of a 20.2 percent drop.
Month-on-month, production fell 1.9 percent, far more than the 0.4 percent dip expected by economists in a Reuters poll.
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"The April industrial production data for the euro zone are very disappointing and raise concern that the region is lagging in terms of signs of recession easing," said Howard Archer, economist at IHS Global Insight.
The data contrasts with more optimistic signs from Japan, where April output gained 5.9 percent month-on-month in the biggest monthly rise for more than half a century, and from China, where factory output rebounded more than expected in May.
In Britain too, industrial output rose month-on-month for the first time in over a year in April.
Industrial production accounts for roughly 17 percent of euro zone gross domestic product, and the grim April data could mean the slowdown in economic contraction in the second quarter could be less pronounced than expected.
The euro zone economy shrank by a record 2.5 percent on a quarterly basis in the first three months of 2009 and the European Commission expects it will shrink only 0.6 percent in the second quarter.
"We haven't lost faith that industrial production data will show a tangible improvement in the next few months, and we think that a technical rebound in positive territory is possible as soon as in the May release," said Marco Valli, economist at Unicredit.
"For the time being, we stick to our view that euro zone GDP will contract 0.6 percent quarter-on-quarter in Q2. But after today's surprise, risks are now tilted to the downside," he said.
Other economists said they expected the second quarter contraction of between 0.8 percent and more than 1 percent.
The monthly and annual fall in the euro zone was led by plunging output of intermediate and capital goods in a sign investment continued to decline.
Economists said the "green shoots" of an economic recovery, seen in forward-looking business surveys, were still far from taking root in the real economy.
"The second quarter has clearly started on a negative note," said Carsten Brzeski, economist at ING.
"The recent improvement of confidence indicators is not, yet, reflected in the real numbers. Weak demand and ongoing stock depletion have clearly driven manufacturers to further cut production," he said. (Reporting by Jan Strupczewski, editing by Mike Peacock)