| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | -0.6% | 0.5% | 0.2% | 0.0% |
| Year over Year | -1.2% | -2.2% | -2.5% |
Highlights
Industrial production was surprisingly firm in June. A solid 0.5 percent rise followed a downwardly revised flat reading in May to lift annual growth from minus 2.4 percent to minus 1.4 percent. Output has now expanded in two of the last three months but has yet to reclaim its level just before March's 4.4 percent monthly slump.
As it is, the June report was very mixed. Hence, while energy saw a 0.5 percent monthly gain, intermediates fell 0.9 percent, capital goods 0.7 percent, consumer durables 0.1 percent and non-durables 1.1 percent. Regionally, only Italy (0.5 percent) amongst the larger member states posted an increase. Production in France was down 0.9 percent, in Germany 1.3 percent and in Spain 0.9 percent.
In fact, despite June's advance, Eurozone industrial production last quarter was still 1.0 percent below its level in the previous period when it contracted 0.3 percent. Goods producing remains mired in recession and a drag on GDP growth. However, at 4 and 9 respectively, the region's ECDI and ECDI-P show overall economic activity running a little ahead of market expectations.
As it is, the June report was very mixed. Hence, while energy saw a 0.5 percent monthly gain, intermediates fell 0.9 percent, capital goods 0.7 percent, consumer durables 0.1 percent and non-durables 1.1 percent. Regionally, only Italy (0.5 percent) amongst the larger member states posted an increase. Production in France was down 0.9 percent, in Germany 1.3 percent and in Spain 0.9 percent.
In fact, despite June's advance, Eurozone industrial production last quarter was still 1.0 percent below its level in the previous period when it contracted 0.3 percent. Goods producing remains mired in recession and a drag on GDP growth. However, at 4 and 9 respectively, the region's ECDI and ECDI-P show overall economic activity running a little ahead of market expectations.
Market Consensus Before Announcement
Production in June is expected to fall 0.6 percent after rising 0.2 percent in May.
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.
