Summary: Euro-zone industrial production up 0.5% in June, contrasts with expected contraction; ANZ: indicates economy may be doing a little better; annual growth rate increases from -2.4% to -1.3%; German, French 10-year yields decline; output expands in just one 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 0.5% in June on a seasonally-adjusted and calendar-adjusted basis. The result contrasted with the 0.6% contraction which had been generally expected and was higher than May’s flat result. The calendar-adjusted contraction rate on an annual basis slowed, from May revised rate of -2.4% to -1.3% in June.
“This was stronger than expected and indicates the EU economy may be doing a little better,” said ANZ economist Madeline Dunk.
German and French sovereign bond yields declined on the day. By the close of business, German and French 10-year bund yield had both lost 2bps to 2.67% and 3.21% respectively.
Industrial production expanded in only one of the euro-zone’s four largest economies. Germany’s production fell by 1.3% over the month while the comparable figures for France, Spain and Italy were -0.9%, -0.9% and 0.5% respectively.