Euro Area: Industrial production collapses at an unprecedented pace in April due to lockdown measures
Industrial output collapsed a seasonally-adjusted 17.1% over the previous month in April, following March’s 11.9% contraction and marking the sharpest deterioration on record.
April’s freefall was again underpinned by diving production of durable consumer goods and capital goods. Moreover, the manufacturing of intermediate goods and of non-durable consumer goods fell rapidly, while the production of energy declined at a softer albeit still marked pace.
Looking at the individual economies for which data is available, the fall in industrial production was broad-based in April. Heavyweights Germany, France, Italy and Spain recorded especially sharp contractions of around 20%. At the same time, output dropped at a much softer pace in the Baltic countries, Finland, Greece and Ireland.
On an annual basis, industrial production nosedived 28.0%—the worst result on record—in April, and much sharper than March’s already significant 13.5% drop. Lastly, annual average variation in industrial production fell to minus 5.0% from March’s minus 2.7%.
Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:
“As restrictions on industry have been gradually lifted since late April, expectations are that May will be the start of a drawn out recovery of output. While expectations of production have indeed improved in surveys, we do see that new orders have continued to come down in May. That means that expectations of a V-shaped recovery for industry would be far too optimistic. As lingering concerns like a new trade war and Brexit continue to be risks to the recovery phase in the months ahead, it could be a long road ahead before industry reaches output seen at the start of 2020. So plenty of risks surrounding industry at the moment, but the recent easing of lockdowns means that activity in April almost certainly marked the bottom.”