| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | -0.4% | 0.5% | 1.6% | 1.7% |
| Year over Year | -0.8% | -3.7% | -3.5% |
Highlights
Industrial production held up much better than expected in June. Following a marginally stronger revised 1.7 percent monthly rise in May, output increased a further 0.5 percent to register its first back-to-back gain since July/August last year. Annual growth climbed from minus 3.5 percent to minus 0.8 percent, a 5-month high.
The monthly advance was largely attributable to capital goods which increased 1.5 percent. Intermediates also rose 0.4 percent and energy 0.3 percent but consumer goods dipped 0.1 percent.
However, despite today's stronger than anticipated report, second quarter industrial production was still 1.2 percent below its level in the previous period, its fourth consecutive quarterly decline. The sector remains mired in recession and business surveys offer little hope of any near-term recovery. The June data put the Italian ECDI at 5 and the ECDI-P at minus 13. Overall economic activity is performing much as expected but the real economy is beginning to struggle to keep up.
The monthly advance was largely attributable to capital goods which increased 1.5 percent. Intermediates also rose 0.4 percent and energy 0.3 percent but consumer goods dipped 0.1 percent.
However, despite today's stronger than anticipated report, second quarter industrial production was still 1.2 percent below its level in the previous period, its fourth consecutive quarterly decline. The sector remains mired in recession and business surveys offer little hope of any near-term recovery. The June data put the Italian ECDI at 5 and the ECDI-P at minus 13. Overall economic activity is performing much as expected but the real economy is beginning to struggle to keep up.
Market Consensus Before Announcement
Production is expected to fall 0.4 percent on the month following a 1.6 percent jump in May.
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.
