Summary: euro-zone industrial production bounces after huge falls in March, April; monthly figure better than consensus estimate; annual rate still very negative; German production rises less than the overall rate.
Following a recession in 2009/2010 and the debt-crisis of 2010-2012 which flowed from it, euro-zone industrial production recovered and then reached a peak four years later in early-2016. Growth rates then fell and recovered through 2016/2017 before beginning a steady and persistent slowdown from the start of 2018. That decline was transformed into a plunge beginning in March 2020.
According to the latest figures released by Eurostat, euro-zone industrial production expanded by a seasonally-adjusted 12.4% in May. The increase was considerably more than the 8.1% median expectation and a partial reversal of April’s 18.2% plunge after revisions. On an annual basis, the seasonally-adjusted growth rate increased from April’s revised rate of -28.8% to -20.6%*.
French and German 10-year bond yields moved uniformly lower on the day. By the close of business, yields on German and French 10-year bonds had both shed 3ps to -0.45% and -0.13% respectively.
Industrial production rebounded across all four of the largest euro-zone economies. Germany’s production increased by 9.7%, less than the euro-zone overall increase. Comparable figures for France, Spain and Italy were 20.0%, 42.1% and 15.1% respectively.
As with other countries’ measures of industrial production, Eurostat’s industrial production index measures the output and activity of industrial sectors in euro-zone countries on aggregate.
* Eurostat’s published annual growth figures are calculated using index figures which are “calendar-adjusted”, not “seasonally adjusted”. The published Eurostat figure was -20.9%.