​Eurozone industrial production recovery disappoints

Eurozone industrial production rose in May, official estimates showed on Tuesday, but the recovery from lockdown-induced record declines March and April was lower than expected and far from offsetting past drops.

Manufacturing output in the region rose by 12.4% in May from April, mostly driven by a surge in production of durable consumer goods, such as cars or fridges, the EU statistics office Eurostat said.

But the increase was significantly lower than the 15% rise expected by economists polled by Reuters.

It was also much less pronounced than the 18.2% decline in April, which had followed a 11.8% drop in March, as factories were forced to shut or reduce activity at the peak of the coronavirus outbreak in Europe.

The limited rebound in May, when many plants reopened, suggest the recovery is limited. The fall in April was also bigger than initially estimated by Eurostat, which on Tuesday revised its month-on-month data to -18.2% from -17.1%.

Compared with a year earlier, industrial production was down by 20.9%, worse than market expectations of 20.0% but better Aprils 28.7% drop.

The rebound from April concerned all economic sectors surveyed by Eurostat. It was mainly driven by a 54.2% leap in the production of durable consumer goods, which nearly offset big falls in the previous two months.

Factories also increased by 25.4% their output of capital goods, such as machinery, in a sign of confidence in long-term economic growth. The increase was, however, lower than the 26.1% fall in April.

Among the largest eurozone states, Italy’s recovery was the most impressive, with plants ramping up production in May by 42.1% compared with April, after the country suffered the bloc’s worst fall in activity in the two previous months combined.

Germany’s industrial production went up by 9.7% on the month, while in France output rose by 20%.

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