July: flat m/m, +7.1% y/y

MNI survey median: +0.3% m/m, +8.0% y/y
MNI survey range: flat to +0.6% m/m

June: -0.2% m/m (revised from -0.1%)
May: +1.1% m/m (unrevised)
April: +0.8% m/m (unrevised)
March: +1.8% m/m (unrevised)
February: -0.7% m/m (unrevised)
—

FRANKFURT (MNI) – Industrial production in the Eurozone was overall
flat in July, as expanding capital goods and consumer non-durables
output offset a further contraction for consumer durables, intermediate
goods and energy, Eurostat reported on Tuesday.

As a result, the annual gain slowed to 7.1%, the smallest rise
since February. Compared to the second quarter average, July’s output
was up 0.2%.

Capital goods production extended its run of increases to five
months, up 0.1% from June to July to end up 9.2% higher on the year.
Non-durable consumer goods also posted a 0.1% rise in July, resulting in
an annual gain of 3.6%.

Losing ground for the second consecutive month, intermediate goods
production slipped 0.3% between June and July to give an annual rise of
9.2%. Energy goods production also sank for the second month in a row,
coming in at 0.1% lower than in June but still 1.9% higher than in July
2009. Durable consumer goods suffered the sharpest decline on the month,
dropping 0.6% to give an annual increase of 5.3%.

The Eurozone manufacturing purchasing managers index (PMI) hit a
six-month low in August at 55.1, suggesting further deceleration in
industrial production. However, output momentum remained intact (55.3)
and, with new orders rising for the 13 consecutive month (55.3) and work
backlogs increasing, business conditions continue to improve.

Industry confidence as measured by the European Commission
stabilized in August somewhat above the long-term average. While
producers’ assessment of orders improved, their output expectations
eroded slightly, suggesting that the recovery in the second quarter is
losing a little momentum.

Surprising to the downside, production in German industry was
unchanged on the month to give an annual increase of 11.4%.

Manufacturers polled for German PMI reported somewhat less robust
production growth in August (60.9). Manufacturers’ expectations at the
six-month horizon, as measured by the Ifo institute, also fell back from
the 37-month high hit in July. Still, like the PMI indicator,
expectations remain well above the norm and suggest that the bulk of
respondents are still optimistic.

While German industrial output was weaker than forecast, French
production recovered somewhat more than generally expected in July by
0.9% for an annual rise of 5.7%.

Citing respondents to its latest survey, the Bank of France
estimated that industrial activity remained stable in August, with the
decline in the automotive sector offset by gains in other sectors.
Forecasts pointed to an increase in output in the months to come.

Industrial production in Italy gained an additional 0.1% from June
to July for an annual rise of 4.8%. Production expectations showed
significant improvement in August, according to Isae’s survey, with both
new orders and the outlook for orders gaining ground, suggesting further
expansion in output in the near term.

Spanish industrial output fell by a further 0.3% in July, as in
June, extending the number of consecutive month declines to three and
narrowing the annual increase to 0.5% in July. Expectations of a
recovery remain less than optimistic, according to the Commission’s
survey, with firms polled assessing order books well below normal.

Elsewhere, the strongest monthly gain was seen in Ireland (+3.2%
m/m, +12.1% y/y). The steepest decline came in Finland (-3.6% m/m, +8.4%
y/y).

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

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