| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | 0.5% | 0.2% | 1.0% |
| Year over Year | -2.2% | 0.2% |
Highlights
Industrial production gained further ground in May but still fell short of the market consensus. A modest 0.2 percent rise followed an unrevised 1.0 percent bounce in April and, with base effects strongly negative, saw annual growth slump from 0.2 percent to minus 2.2 percent.
The monthly rebound was led by capital goods which increased 1.0 percent. However, there were also advances in intermediates (0.5 percent as well as consumer durables (0.5 percent) and non-durables (0.3 percent). Regionally, France (1.3 percent) and Italy (1.6 percent) posted solid advances but Germany (minus 0.2 percent) unwound April's meagre rise.
The modest May update means that Eurozone industrial production remains firmly on course to subtract from second quarter GDP growth, and eventuality made all the more likely by a disappointingly weak June manufacturing PMI (43.4). It also leaves both the ECDI (minus 36) and ECDI-P (minus 40) deep in negative surprise territory and so indicative of overall economic activity running well behind market expectations.
The monthly rebound was led by capital goods which increased 1.0 percent. However, there were also advances in intermediates (0.5 percent as well as consumer durables (0.5 percent) and non-durables (0.3 percent). Regionally, France (1.3 percent) and Italy (1.6 percent) posted solid advances but Germany (minus 0.2 percent) unwound April's meagre rise.
The modest May update means that Eurozone industrial production remains firmly on course to subtract from second quarter GDP growth, and eventuality made all the more likely by a disappointingly weak June manufacturing PMI (43.4). It also leaves both the ECDI (minus 36) and ECDI-P (minus 40) deep in negative surprise territory and so indicative of overall economic activity running well behind market expectations.
Market Consensus Before Announcement
Production in May is expected to rise a further 0.5 percent after chewing back lost some ground in April with a 1.0 percent rebound.
Definition
Industrial production measures the physical output of factories, mines and utilities. The measure provided by Eurostat excludes the volatile construction subsector for which data are released a few days later.
Description
Industrial production measures changes in the volume of output for the EMU's member states. The industrial production index provides a measure of the volume trend in value added at factor cost over a given reference period, excluding VAT and other similar deductible taxes. The preferred number is industrial production excluding construction. As with other EMU statistics, the data are provided by the national statistics offices to Eurostat (the European Union statistical agency) where it is combined to produce an overall output measure.
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
