| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.8% | 1.6% | -1.9% | -2.0% |
| Year over Year | -3.7% | -7.2% | -7.4% |
Highlights
Industrial production rebounded more strongly than expected in May. However, while a 1.6 percent monthly increase was double the market consensus, it failed to reverse a slightly steeper revised 2.0 percent fall in April and constituted only the first advance so far in 2023. Annual growth climbed from minus 7.4 percent to minus 3.7 percent.
The monthly gain was led by capital goods which were up 1.4 percent. Intermediates (1.2 percent) and consumer goods (1.1 percent) were not far behind and energy (0.1 percent) also edged firmer.
Despite today's stronger than anticipated report, industrial production remains mired in recession and should again subtract from second quarter GDP growth. Indeed, output is still at its second lowest level since January 2022. That said, the May data at least lift the Italian ECDI and ECDI-P to 18 and 21 respectively, showing a moderate degree of outperformance versus market expectations.
The monthly gain was led by capital goods which were up 1.4 percent. Intermediates (1.2 percent) and consumer goods (1.1 percent) were not far behind and energy (0.1 percent) also edged firmer.
Despite today's stronger than anticipated report, industrial production remains mired in recession and should again subtract from second quarter GDP growth. Indeed, output is still at its second lowest level since January 2022. That said, the May data at least lift the Italian ECDI and ECDI-P to 18 and 21 respectively, showing a moderate degree of outperformance versus market expectations.
Market Consensus Before Announcement
Production in May is expected to rise 0.8 percent on the month following a 1.9 percent fall in April.
Definition
Industrial production measures the physical output of the nation's factories, mines and utilities. Construction is excluded. Approximately 4,100 companies provide data on more than 8,000 monthly flows of production.
Description
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. Like the PPI and the orders data, construction is excluded from the data. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
