| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | -0.7% | -1.1% | 0.5% | 0.4% |
| Year over Year | -0.4% | -2.2% | -1.2% | -1.1% |
Highlights
Eurozone industrial production declined by 1.1 percent between June and July, well below the consensus forecast of a 0.7 percent fall. That comes after a 0.4 percent rise in June, revised downward from the initial estimate of a 0.5 percent increase.
That takes the eurozone RPI to -20, and the RPI-P to -39.
Output slumped by 2.2 percent in the 12 months to July, sharply down on the consensus forecast of a 0.4 percent decline. Annual output declined by 1.1 percent in June, slightly better than the originally reported 1.2 percent slump.
The data come as little surprise after industrial output in Germany declined by a higher-than-expected 0.8 percent in July, the third straight contraction. With German factory orders down by 11.7 percent in July, there appears little prospect of a quick manufacturing turnaround in the EU's biggest economy.
Despite the recent stickiness in eurozone service price inflation, softness in the bloc's industrial sector could tip the balance toward a pause in monetary tightening at Thursday's ECB meeting. ECB President Christine Lagarde has studiously avoided commenting on current policy in recent speeches, even as hawks on the governing council have publicly hinted at the need for higher rates.
That takes the eurozone RPI to -20, and the RPI-P to -39.
Output slumped by 2.2 percent in the 12 months to July, sharply down on the consensus forecast of a 0.4 percent decline. Annual output declined by 1.1 percent in June, slightly better than the originally reported 1.2 percent slump.
The data come as little surprise after industrial output in Germany declined by a higher-than-expected 0.8 percent in July, the third straight contraction. With German factory orders down by 11.7 percent in July, there appears little prospect of a quick manufacturing turnaround in the EU's biggest economy.
Despite the recent stickiness in eurozone service price inflation, softness in the bloc's industrial sector could tip the balance toward a pause in monetary tightening at Thursday's ECB meeting. ECB President Christine Lagarde has studiously avoided commenting on current policy in recent speeches, even as hawks on the governing council have publicly hinted at the need for higher rates.
Market Consensus Before Announcement
Production in July is expected to fall 0.7 percent after rising 0.5 percent in June. Consensus for July's year-over-year rate is contraction of 0.4 percent.
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.
