Summary: Euro-zone industrial production down 0.3% in July, in line with expectations; down 2.2% on annual basis; German, French 10-year yields unchanged or lower; contraction in all four largest 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 since early 2023 have generally declined.
According to the latest figures released by Eurostat, euro-zone industrial production contracted by 0.3% in July on a seasonally-adjusted and calendar-adjusted basis. The fall was in line with expectations but down from June’s flat result after revisions. On an annual basis, the contraction rate slowed from June’s revised rate of 4.1% to 2.2%.
Long-term German and French sovereign bond yields either finished unchanged or down slightly on the day. By the close of business, the German 10-year bond yield had returned to its starting point at 2.15% while the French 10-year yield finished 2bps lower at 2.84%.
Industrial production contracted in all of the euro-zone’s four largest economies. Germany’s production fell by 3.0% over the month while the comparable figures for France, Spain and Italy were -0.5%, -0.7% and -0.9% respectively.