April: +0.8% m/m, +9.5% y/y

MNI survey median: +0.6% m/m, +8.7% y/y
MNI survey range: +0.1% to +0.8% m/m

March: +1.5% m/m (revised from +1.3%)
February: +0.8% m/m (revised from +0.7%)
January: +2.0% m/m (revised from +1.9%)
December: +0.8% m/m (unrevised)
November: +1.4% m/m (revised from +1.3%)
—

FRANKFURT (MNI) – Industrial output in the Eurozone increased for
the eleventh consecutive month in April to its highest level since
November 2008, beating general expectations, while gains in four of
previous five months were revised upwards, Eurostat reported on Monday.

Taking into account the upward revisions, the 0.8% m/m April rise
in production left output 9.5% higher on the year, its fastest annual
rise on record.

The strongest jump was noted in intermediate goods, which increased
at one year-high of 2.2% m/m and widened the annual gain to a
series-high 16.0%. Capital goods output also continued to expand,
jumping 1.1% on the month and 8.9% y/y, the highest reading since August
2006.

However, the gain in industry was not broad-based. Energy goods
production fell 0.9% m/m, though it was still 6.9% higher on the year.
Durable consumer goods output declined 0.1% on the month, narrowing the
annual increase to +1.4%, while non-durable consumer goods production
slipped 1.2%, partially undoing the previous month’s rise and bringing
the annual change to +3.0%.

Manufacturers in the latest purchasing managers index (PMI) poll
said output and new orders continued higher in May, but the pace of
growth slowed sharply, leaving the PMI at a three-month low of 55.8
after April’s 57.6.

“The May PMIs highlight the speed with which uncertainty
surrounding the sovereign debt crisis appears to have hit business
activity,” Markit chief economist Chris Williamson said. “The extent to
which manufacturing growth slowed in May has been exceeded only once in
the survey’s 13-year history — in the aftermath of the Lehman’s
collapse.”

Nevertheless, producers’ assessment of order books, including
foreign orders, improved in May as well as their output expectations for
the near term, the European Commission’s survey showed.

Strong growth out of the construction sector continued to boost
overall industrial output in Germany, leaving production up 0.8% m/m and
13.9% y/y.

With new orders surging for the second consecutive month in April
and Germany likely to benefit further from the weak euro, more good news
can be expected ahead.

Italian production grew at 1.0% on the month, giving an annual
figure of +7.8%, its fastest rise since December 2000. Sector sentiment
rose to a two-year high in May, according to ISAE’s poll, even though
respondents revised down yet again production expectations and were
still less than confident regarding overall demand.

Industry output in France unexpectedly fell on the month in April
by 0.4%, leaving the annual change at +9.0%.

According to the Bank of France’s latest survey on industry,
overall activity edged up in May, while order books remained close to
normal, leaving sentiment in the sector little changed on the month.
The PMI poll continued to signal brisk growth in output and orders in
May, though down from recent peaks.

In Spain, industrial output also lost ground, slipping 0.3% since
March, leaving production up 2.4% on the year.

— Frankfurt bureau: +49 69 720 142. Email: frankfurt@marketnews.com —

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