French, German industrial output drop unexpectedly in May

(Reuters) - Industrial production in France and Germany fell more than expected in May, data published by domestic statistics offices showed on Friday, due to the impact of public holidays and a weak economic environment.

France's Insee reported a 2.1% drop in industrial production in May, compared with April figures, while economists polled by Reuters on average expected a decrease of 0.5%.

Germany also recorded a steeper-than-expected 2.5% decline in industrial output for May compared to the previous month. Analysts had forecast a 0.2% rise.

The timing of public holidays "may have amplified reductions in activity" over the month, as production fell in almost all major industrial branches, INSEE said in its press release.

"Supply difficulties continued to affect automotive production this month, as they did last month; numerous technical and regulatory stoppages penalized production in the chemicals sector," the agency told Reuters in an email, pointing also to challenges in metals manufacturing and construction.

The French statistics agency said German activity and order books remain well below long term averages which was not the case for France, where the downturn could be regarded partly as a one-off event.

The gradual slowing of the U.S economy, a major trading partner for France and Germany, was another potential factor impacting output, said ING's Head of Macro Carsten Brzeski.

He also pointed to trade tensions with China and labour shortages.

Industrial production figures for the euro zone fell short of analyst expectations in April, according to data published by Eurostat. The indicator was down 0.1% on a monthly basis, while economists consulted by Reuters expected a 0.5% rise.

(Reporting by Alban Kacher;Editing by Elaine Hardcastle)