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Irish Quirks Aside, Ind Prod Was Very Weak In July Led By Germany

EUROZONE DATA
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Eurozone industrial production contracted further in July, with the -1.1% M/M (SWDA) print below the -0.9% expected, and the -2.2% Y/Y (WDA) figure badly missing even the lowest analyst expectation in the Bloomberg survey (of -1.0%; median was -0.3%).

  • Capital goods production fell 2.7% M/M / though up 0.4% Y/Y; durable consumer goods -2.2% M/M / -6.7% Y/Y; non-durables +0.4% M/M / -0.6% Y/Y; energy +1.6% M/M / -5.7% Y/Y.
  • As usual we take these figures warily, as there have once again been significant distortions created by the Irish data (-6.6% M/M after +11.7% Jun; -6.1% Y/Y after +6.3% Jun): the ex-Ireland Eurozone figures would have been closer to -0.7% M/M and -1.9% Y/Y (the previous month Irish IP boosted EZ 0.7pp M/M and 0.4pp Y/Y; see chart below for MNI estimates of M/M contributions to the aggregate).
  • There can be no doubt though that even considering these distortions, Eurozone industrial production is in a slump. All but 2 members (Malta, France) saw negative Y/Y IP in July and the IP index is at the same level as in 2018.
  • The key story that we already knew from the national level data that Germany's industrial sector is deteriorating quickly, and it was the biggest M/M drag on IP in July (ex-Ireland) for the 3rd consecutive month.
  • With factory orders down 11.7% M/M in July, the biggest drop since April 2020, and flat IFO manuf expectations/ German Manuf PMI <40, it's unlikely we will see much relief soon.



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Eurozone industrial production contracted further in July, with the -1.1% M/M (SWDA) print below the -0.9% expected, and the -2.2% Y/Y (WDA) figure badly missing even the lowest analyst expectation in the Bloomberg survey (of -1.0%; median was -0.3%).

  • Capital goods production fell 2.7% M/M / though up 0.4% Y/Y; durable consumer goods -2.2% M/M / -6.7% Y/Y; non-durables +0.4% M/M / -0.6% Y/Y; energy +1.6% M/M / -5.7% Y/Y.
  • As usual we take these figures warily, as there have once again been significant distortions created by the Irish data (-6.6% M/M after +11.7% Jun; -6.1% Y/Y after +6.3% Jun): the ex-Ireland Eurozone figures would have been closer to -0.7% M/M and -1.9% Y/Y (the previous month Irish IP boosted EZ 0.7pp M/M and 0.4pp Y/Y; see chart below for MNI estimates of M/M contributions to the aggregate).
  • There can be no doubt though that even considering these distortions, Eurozone industrial production is in a slump. All but 2 members (Malta, France) saw negative Y/Y IP in July and the IP index is at the same level as in 2018.
  • The key story that we already knew from the national level data that Germany's industrial sector is deteriorating quickly, and it was the biggest M/M drag on IP in July (ex-Ireland) for the 3rd consecutive month.
  • With factory orders down 11.7% M/M in July, the biggest drop since April 2020, and flat IFO manuf expectations/ German Manuf PMI <40, it's unlikely we will see much relief soon.