Euro zone industrial output fell in June, failing to meet economists' expectations and underscoring concerns over Europe's ability to shake off economic gloom.

Industrial production, a key component of gross domestic product (GDP), fell 0.7 per cent on the month in June, compared with a Reuters forecast for no change, data from the European Union's statistics office, Eurostat, showed today.

On the year, output increased by 2.9 per cent, far short of forecasts for a 4.4 per cent rise.

Economists said the figures showed recovery in industry was losing steam in Europe's 17-member single currency area, the euro zone, and bode poorly for economic growth during the second half of the year.

The fall in output was driven by a sharp decline in durable consumer goods, with production down 2.5 per cent on the month and 2.7 per cent on the year. Non-durable goods fell 0.5 per cent and rose 1.2 per cent from June 2010.

Throughout the 27-Member state European Union, production fell by 1.2 per cent in June.

Reuters