Summary: Euro-zone industrial production down 0.7% in March; slightly worse than expected; annual growth rate reverses, down 0.8%; contracts in all but one of euro-zone’s 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 in more-recent months has generally stagnated.
According to the latest figures released by Eurostat, euro-zone industrial production contracted by 0.7% in March on a seasonally-adjusted and calendar-adjusted basis. The fall was slightly worse than the 0.5% contraction which had been generally expected and it contrasted with February’s 0.5% rise after revisions. The calendar-adjusted growth rate on an annual basis reversed from February’s revised rate of +1.7% to -0.8%.
German and French sovereign bond yields increased noticeably on the day despite the figures. By the close of business, the German 10-year bund yield had gained 8bps to 0.94% while the French 10-year OAT yield finished 7bps higher at 1.45%.
Industrial production contracted in all but one of the euro-zone’s four largest economies, with Germany’s output hit especially hard. Germany’s production contracted by 5.0% while the growth figures for France, Spain and Italy were -0.5%, 0.0% and -1.8% respectively.