Summary: Euro-zone industrial production increases in January; rise in contrast to expected fall; annual growth rate back above zero.
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 early 2016. Growth rates then fluctuated through 2016/2017 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 but subsequent months in 2020 produced an almost-complete recovery.
According to the latest figures released by Eurostat, euro-zone industrial production increased by 0.8% in January on a seasonally-adjusted and calendar-adjusted basis. The rise was in contrast to the 0.2% contraction which had been generally expected and December’s -0.1% after revisions. On an annual basis, the calendar-adjusted growth rate increased from December’s revised rate of -0.1% to +0.1%.
German and French 10-year sovereign bond yields moved higher on the day. By the close of business, the German and French 10-year yields had each gained 3bps to -0.31% and -0.06% respectively.
Industrial production growth expanded in only two of the euro-zone’s four largest economies. Germany’s production contracted by 0.4% while the comparable figures for France, Italy and Spain were +3.4%, +1.0% and -0.7% respectively.