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Industrial Production Sees Softer Decline in June

MNI (London)

GERMANY JUN IP +0.4% M/M (FCST -0.3%); MAY -0.1%r M/M
GERMANY JUN IP -0.5% Y/Y (FCST -1.3%); MAY -1.7%r Y/Y

  • German industrial production was more resilient than anticipated in the June report, seeing a small +0.4% m/m increase and a softer fall in the annualised print at -0.5% y/y (vs. May -1.7% y/y and the forecasted slide of -1.3% y/y).
  • Both May readings saw downwards revisions of 0.2-0.3pp.
  • Energy and construction industries were the key downwards drivers of the headline number, with energy production stalling at 0.0% m/m in June and Production declining by -0.8% m/m. Excluding energy and construction, IP would've expanded by a stronger +0.7% m/m.
  • Supply bottlenecks and extreme shortages continue to hamper German production due to distortions caused by the Ukraine war and the lasting effects of the pandemic, highlighted by 3/4 of firms expressing persisting issues.
  • Following this data is French IP at 0745 BST and Italian at 0900 BST. Expectations of further substantial slowdown into the end of the year would feed into the ECB’s calculations regarding the resilience of a fragile euro area economy.

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