Industrial Production Fell Less Than Expected

Eurozone industrial production fell less than expected in May at -0.6% M/M (vs -0.8% consensus, 0.0% revised prior from -0.1%). The annual reading was also better than expected printing -2.9% Y/Y (vs -3.6% consensus, -3.1% prior revised from -3.0%).

• Although a smaller fall than expected, Eurozone Industrial Production remains in contractionary territory for the fifth consecutive month on an annual basis, with it's first negative sequential print since January 2024.
• The upside surprise in the May monthly print relative to consensus may have been at least partially driven by Ireland, which saw production rise 6.7% M/M (contributing more than +0.5% M/M) after falling 3.3% last month. Followed by Italy which saw industrial production rise 0.5% M/M - the first increase since December 2023.
• Amongst the largest members of the Eurozone, the continued weakness was driven by Germany which printed a fall of 2.4% M/M - the largest decline since December 2022, followed by France which saw its steepest sequential deterioration since October 2022 printing -2.1% M/M. Spain and the Netherlands also contributed negatively printing -0.2% and -0.4%.
• From a sectoral perspective, 3 of 5 sub-components fell. Capital goods production fell 1.2% M/M - the first fall since January 2024, whilst durable consumer goods fell 1.8% and intermediate goods production declined -1.0% - the third consecutive monthly drop.
• Meanwhile, energy production rose for the first time since January 2024, printing 0.8% M/M, and non-durable consumer goods rose for the second successive month printing 1.6% M/M.