Industry Bounce In August Less Impressive Ex-Ireland

Eurozone industrial production in August saw its biggest rise in M/M seasonally adjusted terms since April (+0.6% vs -1.3% prior), with rises in durable consumer goods (+1.2% vs -1.3% Jul) and non-durables (+0.5%, same as Jul) outweighing declines in energy (-0.9% vs +1.2% Jul) and intermediate goods (-0.3% vs +0.2%). Capital goods production came in at 0.3% (-3.1% Jul).

• On an annual basis though, total industry slumped -5.1% Y/Y, with all categories in contraction (capital goods and durable goods each shrinking more than 7%).
• Once again though it's difficult to get a read on aggregate dynamics given the outsized contribution of Ireland, which saw the largest gain in Aug (+6.1% vs -9.0% prior and +9.3% in June) on a M/M basis, but also the biggest decline by far on a Y/Y basis (-27.3%).
• Excluding Ireland (which contributed 0.4pp to M/M growth), eurozone IP would have growth by roughly 0.2% M/M, the first such rise since May but not enough to offset the large declines of the previous 2 months. Germany and Italy contributed slightly to the overall M/M figure, with France, the Netherlands, and Spain dragging.
• The Y/Y figure is likewise mitigated by Ireland's outsized drag (-1.6pp) but Germany pulled the headline figure down by 0.8pp for a 2nd consecutive month, with the Netherlands, Spain, and Italy all slumping too (France was the outlier, contracting Y/Y for the first time since January).
• Overall despite the Irish statistical distortion, there is no question that Eurozone industry is in the midst of a significant and broad-based contraction, with both demand (domestically and overseas eg China) and supply (energy, labour market) constraints weighing.

Source: Eurostat, MNI Calculations