A Disappointing Recovery in Eurozone Industrial Production in June

Official data showed an increase in industrial production for the euro area in June, but the recovery that came after record declines in March and April caused by the Coronavirus pandemic was below expectations for the second month in a row and slower than May.

The increase in industrial production was driven by a rise in the production of durable goods, such as cars and refrigerators, in what may be considered a positive indicator of consumer confidence while easing restrictions to limit the spread of the virus in the region. But the month-on-month increase was lower than economists expected, slower than May, and output remained well below pre-pandemic levels.

The European Union’s statistics office Eurostat reported industrial production in the 19-country single currency area rose 9.1% in June from May, after rising 12.3% in May on a monthly basis.

Economists polled by Reuters had forecast a 10% increase in June, month over month. The May reading was also disappointing for economists, who expected a 15% increase as factories return to work after the lockdowns eased.

Eurostat also revised its previous estimate of industrial production in May, down slightly from 12.4%.

In a clearer indication that the region’s manufacturing sector is still far from recovering, production fell 12.3% in June year on year, more than market expectations of a 11.5% decline. But the year-on-year decline was less pronounced compared to May and April, confirming a gradual recovery.