Industrial Production Up by 0.5% in the Euro Area

The latest data release from Eurostat, shows that seasonally adjusted industrial production has risen 0.5% in the euro zone between April and May 2017. The annual rate has risen by 1.4% in both the euro area and the EU28. 

Source: Eurostat

This  is largely due to a 4.7% increase in the production of energy, with a 0.6% rise in the production of durable consumer goods, a 0.2% rise in the production of non-durable consumer goods and a 0.1% rise in the production of intermediate goods making up for a 0.7% decrease in the production of capital goods. 

The 0.5% total increase was spurred by a 1% country-level increase in Germany, covering smaller decreases in France (down 0.6%), Italy (down 0.4%) and Spain (down 0.1%). Although, among member states for which data are available, the highest country-level increases were reported in Ireland (+7.7%), Malta (+2.9%), and Portugal (+2.0%). The highest decrease was recorded in Slovakia (-10.9%), 

In total, aggregate euro zone industrial production is increasing and the goods sector is predicted to experience a stable second quarter.  

Solid Growth Reported in the Eurozone Retail Sector for May 2017

Eurozone retailers recorded an increase in like-for-like sales in May according to the latest IHS Markit Eurozone Retail PMI report. While positive overall, the data highlighted a country level discrepancy: encouragingly high levels of growth in Germany and France counterbalanced a continuing decline in retail sales in Italy.

The IHS Markit Eurozone Retail PMI (measuring month-on-month changes in like-for-like retail sales in France, Germany, and Italy) was measured at 52.0. Decreasing from 52.7 in April, the reading points to a solid though slightly weaker rise in sales for the month.

Conversely, sales were down on an annual basis and the data showcased across the board under performance by retailers. All three countries reported gaps between forecast and actual sales with the highest discrepancy recorded in Italy.  

Gross margins fell sharply as retailers were faced with a rise in average purchasing costs. Input price inflation was reported in all three economies, most markedly in Germany.

High levels of purchase activity were also reported, catalyzed by high sales volumes and contributing to a continuing increase in stocks of goods for resale.

Finally, the data showed a rise in retail sector employment, continuing a trend which began in November 2015.

Alex Gill of IHS Markit concludes, “Overall the data paint a positive picture of the euro area retail sector. However, a sharp fall in gross margins suggests the business climate remains challenging”.