Spain: Industrial production contracts in October
December 3, 2010
In October, industrial production contracted 3.8% over the same month last year, which followed a 1.0% drop in September (previously reported: -0.8% year-on-year), and represented the biggest drop since February, as austerity measures dent economic recovery. On a working-day adjusted basis, industrial output dropped 1.9% year-on-year, lower than the 1.6% contraction recorded in September and less severe than market expectations of a 2.3% decline. The October contraction was driven by a fall in manufacturing output (-4.6% yoy). On a positive note, mining and the electricity, gas, steam and air conditioning sector continued to grow. On a use-based classification, declining output of durable and capital goods was the main driver behind the October contraction. Energy production was the only sub-sector that expanded over the same month last year. Despite the monthly contraction, the trend continues to improve, with the annual average variation in industrial production swinging from minus 0.9% in September to a positive 0.1% in October, which marks the first positive reading since April 2008.