Summary: Euro-zone industrial production suffers huge contraction in March; monthly figure better than consensus estimate; large economies hit hard.
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 in aggregate. 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 has now turned into a plunge.
According to the latest figures released by Eurostat, euro-zone industrial production contracted by a seasonally-adjusted 11.3% in March. The fall was not as much as the -12% which had been expected but it was still a massive extension on February’s 0.1% decline. On an annual basis, seasonally-adjusted growth in industrial production also plunged from February’s revised rate of -1.9%, registering -12.8%*.
Industrial production fell by double-digit percentages across all four of the largest euro-zone economies. Germany’s industrial production decreased by 11.2%, Spain shrank by 11.9%, France’s comparable rate was -16.4%. Italy’s production collapsed by 28.4%.
French and German 10-year bond yields both eased just a little as the figures had been largely factored in prior to the report’s release. By the close of business, yields on German 10-year bunds and French 10-year OATs had each shed 2bps to -0.53% and -0.05% respectively.