EU Industrial Production Dives Again

The European Union’s statistical agency, Eurostat, has released its report for April’s EU industrial production. Among the 17 members of the Eurozone, production fell -0.8% compared with March production, and among all 27 EU members production fell by -0.4%.

By virtually every sub-category measure, the Eurozone did worse than the EU as a whole: capital goods production fell by -2.6% in the Eurozone compared with -1.8% in the EU; non-durable goods fell by -1.6% and -1.5%; and durable goods production fell by -0.9% in the Eurozone but rose by 0.6% in the EU. Energy production rose by 6.9% in the Eurozone and 5.7% in the EU.

Portugal, Germany, and Italy led the decline in industrial production, with drops of -6.5%, -2.0%, and -1.9%, respectively. UK industrial production was exactly flat according to Eurostat.

Year-over-year the decline in industrial production in the Eurozone totaled -6.2% and -4.5% in the EU. The largest year-over-year drops were posted in Italy (-9.2%), Spain (-8.3%), and Portugal (-7.6%).
Industrial production has fallen in five of the past six months in the Eurozone and in the EU as a whole. In the UK, industrial production fell year-over-year by -1.7% in April, the sixth decline in a row.

Even Latvia, which is often held up as the poster child for the success of austerity, saw industrial production fall by -1.2% month-over-month although its annual production did rise by 3.8% year-over-year. However the March year-over-year rise was 8.5% and in 4 of the last 6 months Latvia’s production rose by at least 7.5%.

The takeaway from all this is that austerity measures, especially in the Eurozone and the UK, have not improved production numbers. US stock futures indexes are down this morning as are European equities markets. The primary cause for the decline is likely the high yields forced on Italian bonds this morning, but the industrial production numbers did nothing to soften that blow.

Paul Ausick