Euro Area Industry June 2021

Euro Area: Industrial production contracts again in June

August 12, 2021

Industrial output fell a seasonally-adjusted 0.3% over the previous month in June, following May’s 1.1% decrease. June’s drop reflected declines in the production of energy and capital goods. On the other hand, the production of intermediate goods as well as of durable and non-durable consumer goods expanded.

Looking at the individual economies for which data is available, industrial output shrank in eight countries, while it expanded in 10 countries. Within the most important economies, production increased in France, Italy and Spain, while it dropped in Germany.

On an annual basis, industrial production increased 9.7% in June, as it still benefited from a low base effect, following May’s 20.6% jump. Lastly, annual average growth in industrial production improved to 4.6% from May’s 2.9%.

Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:

“Supply constraints continue to dampen production but as demand remains strong, this is unlikely to throw off the economic recovery altogether. Still, continued problems do weaken third quarter GDP growth prospects somewhat.”

Overall, our panelists see industrial production expanding 6.7% in 2021, which is up 0.3 percentage points from last month’s forecast. For 2022, panelists see industrial production growing 3.1%.

Author: Massimo Bassetti, Senior Economist

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