Euro Area Industry July 2021

Euro Area: Industrial production rebounds in July

September 16, 2021

Industrial output increased a seasonally-adjusted 1.5% over the previous month in July, contrasting June’s 0.1% dip. July’s rebound reflected faster increases in the production of intermediate, durable and non-durable consumer goods as well as a bounce-back in the production of capital goods. On the other hand, the production of energy dropped at a slightly sharper pace.

Looking at the individual economies for which data is available, industrial output expanded in 15 countries, while it shrank in three countries. Within the most important economies, production increased in France, Germany, Italy and Spain.

On an annual basis, industrial production increased 7.7% in July, as it still benefited from a low base effect, following June’s 10.1% jump. Lastly, annual average growth in industrial production improved to 4.8% from June’s 3.5%.

Commenting on the release, Peter Vanden Houte, economist at ING, stated:

“Supply problems or not, with the summer holidays starting in July, activity in industry is usually lower anyway and the month-on-month growth figure therefore gets a boost from the seasonal adjustment. This seasonal adjustment will be even stronger in August. We therefore have to wait until September to know the extent to which supply chains have normalised and production can pick up more structurally, but recent reports are still qualified in that regard.”

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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