Euro Area: Industrial declines in May
Industrial production decreased 0.6% month-on-month in seasonally adjusted terms in May (April: 0.0% mom). Looking at the details of the release, the contractions in intermediate goods and in durable consumer goods widened in May. Moreover, capital goods output swung to contraction and non-durable consumer goods production decelerated.
On an annual basis, industrial production fell at a more moderate pace of 2.9% in May (April: -3.1% yoy). Meanwhile, the trend pointed down, with the annual average variation of industrial production coming in at minus 3.9% in May, down from April’s minus 3.8%.
Bert Colijn, senior economist at ING, commented on the outlook:
“There is no imminent sign of a recovery for industry. The second half of the year could show a turnaround if consumption picks up more rapidly on the back of the real wage recovery, though. Still, evidence of that is still lacking, which provides a reality check for the pace of economic growth that the eurozone is currently experiencing.”