Summary: Euro-zone industrial production up 0.6% in August, more than expected; down 5.1% on annual basis; German, French 10-year yields fall; output expands in two of four largest euro economies.
Following a recession in 2009/2010 and the debt-crisis which flowed from it, euro-zone industrial production recovered and then reached a peak four years later in 2016. Growth rates then fluctuated for two years before beginning a steady and persistent slowdown from the start of 2018. That decline was transformed into a plunge in March and April of 2020 which then took over a year to claw back. Production levels in recent quarters have generally stagnated in trend terms.
According to the latest figures released by Eurostat, euro-zone industrial production expanded by 0.6% in August on a seasonally-adjusted and calendar-adjusted basis. The result was more than the 0.2% expansion which had been generally expected and in contrast to July’s 1.3% contraction. However, the calendar-adjusted contraction rate on an annual basis accelerated, from July’s revised rate of -2.2% to -5.1%.
German and French sovereign bond yields fell on the day. By the close of business, the German 10-year bond yield had shed 6bps to 2.73% while the French 10-year bond yield finished 4bp lower at 3.36%.
Industrial production expanded in two of the euro-zone’s four largest economies. Germany’s production crept up 0.1% over the month while the comparable figures for France, Spain and Italy were -0.2%, -0.7% and 0.2% respectively.