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UPDATE 1-Spain's Feb industrial output falls by new record

Published 04/03/2009, 04:41 AM
Updated 04/03/2009, 05:08 AM

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MADRID, April 3 (Reuters) - Spain's industrial output took a record fall for the third month running in February, although analysts said there was a chance firms might soon begin to renew stock, easing the rate of decline.

More recent data on Friday from Spanish services companies showed that sector's decline slowed in March, and that firms are becoming less pessimistic about business prospects in 12 months' time.

However, February industrial output fell 22 percent from a year earlier compared with a 20.9 percent drop in January and a forecast 20.6 percent fall and the data showed weakness across all industrial sectors.

"The pace of decline and contraction in industry may slow a bit but we're still miles away from positive growth, so it depends how quickly these PMI numbers will start to improve," said Martin Van Vliet, a senior economist at ING.

Some economists now think an inventory-led bounce is possible after months of plunging stock levels across Europe, and that the worst may have passed in terms of cuts in output.

"What we've seen are tentative signs of bottoming out on the PMI services, though they still remain way below the 50 area which would signal expansion," said economist at 4Cast Jose Garcia Zarate.

(Reporting by Paul Day, Editing by Ruth Pitchford)

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