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Industrial Production Slump Amplified by Volatile Irish Data

EUROZONE DATA
MNI (London)

EUROZONE MAR INDUST PROD -4.1% M/M (FCST -2.8%); FEB +1.5% M/M

EUROZONE MAR INDUST PROD -1.4% Y/Y (FCST ); FEB +2.0% Y/Y

  • Euro area industrial production contracted more than anticipated in March, falling -4.1% m/m. This was 1.3pp worse than consensus expectations and undoing two consecutive months of m/m growth.
  • This was the strongest m/m contraction since the onset of the pandemic in 2020, however is substantially skewed by volatility in Irish data (-26.3% m/m in March) which is exposed to large shifts in multi-national pricing. Our calculations point towards a softer contraction of approx. -1.5% m/m when excluding Irish data and reweighting the remaining country indexes.
  • Capital goods production led the decline in March, sliding a marked -15.4% m/m (likely reflecting the Irish contraction). Further contractions were recorded across intermediates (-1.6% m/m), energy (-0.9% m/m), nondurables (-0.8%) whilst consumer durables rose +2.8% m/m.
  • Compared to March 2022, production was down -1.4% y/y. PMI data continues to signal that overall outlooks for the industry remain lacklustre, with declining new orders and clouded demand outlooks weighing on sentiment.

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