Bert Colijn
ING Economic and Financial Analysis
Growth in production dropped from 5% to 0.7% month-on-month in August. The strong rebound seems to be behind us as the fourth quarter brings only more uncertainty for industry.
The small gain in August leaves us with the impression that the first months of rapid recovery from the lockdown period are behind us. Production is now 6.7% lower than it was in February, before the Covid-19 crisis began. The slowdown in production was mainly due to a decline in capital and non-durable consumer goods production, which was the first decline in the subcategories of production since the last full lockdown month (April).
Production of durable consumer goods continued to pick up and is now already well above pre-crisis levels, indicating that the recovery in production is becoming increasingly lopsided towards durable goods consumption.
Survey data on manufacturing has so far continued to indicate an accelerated recovery for eurozone industry, making today’s release a bit of a disappointment. Then again, industrial production is a volatile indicator, which means that September figures could come in somewhat stronger again.
The big question however, is how industry can continue to perform in the fourth quarter of the year. With rebound effects fading, second waves emerging and restrictive measures becoming more intrusive for business, there is no doubt that the rosy figures related to the rebound from the first lockdown are a thing from the past. After the strong growth figures for the third quarter, eking out small gains in 4Q looks like a pretty good result at the moment.
Read the original analysis: Eurozone industrial recovery almost stalled in August
Content disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more here: https://think.ing.com/content-disclaimer/
Recommended Content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.