Industrial production in the Euro zone increased in May, but the recovery from the outbreak impact in declining economic activities in March and April is still lower than expected. The country’s manufacturing output in May increased as much as 12.4% month-by-month compared to April, as driven by production surge of durable consumer goods such as electronics appliances and automotives, Eurostat, the EU statistic office noted, but still lower than the initial projection of 15% in media poll survey.
The elevated output was also less than the decline in April, a 18.2% which followed the earlier drop of 11.8% in March due to the screeching halt of production in lockdown or running in minimal activities at the peak of Europe's coronavirus outbreak. The drop in April also steeper than initially projected by Eurosat in a month-on-month data revision from earlier -17.1% to -18.2% on Tuesday, July 14. A year-on-year comparison shows industrial production slid by 20.9%, slightly lower than expected 20.0% but made an improvement from 28.7% drop in April.
May’s rebound is still limited although many of the plants have already reopened, implying limited recovery. The rebound is concerning all economic sectors in the Eurostat survey, as it was driven almost solely from the 54.2% high leap in durable consumer goods production and nearly balanced the previous months' falls. Factories expand their output of capital goods like machinery by 25.4%, showing confidence in long-term growth, even though the percentages still lower than a 26.1% fall in April.
Among Euro zone countries, Italy marks the most impressive recovery with a boost of production by 42.1% in May compared month-on-month to April level, after the two month of combined worst fall of activity in the region. Germany also booked an industrial production increase of 9.7% month-on-month, while France record a raise in output by 20.0%.
