Industrial production in Europe strong in recession – price data in UK weak

Industrial production has been in a deep recession for months, whether you look at the EU as a whole or just the Eurozone. And as Eurostat’s freshly released data for September shows, the same is true. Compared to September 2018, industrial production is down by 1.2% in the EU and by 1.7% in the Eurozone. In the previous months, the decline was also very strong across the board. A clear and structural recession. Looking at the details, this industrial recession is mainly expected to come from the industrial heartland of Germany, which currently stands at -5.3%. Other large countries, such as France, are at rates of change of 0.0%, Spain at +0.4% and Italy at -2.1%. Hungary with a large supplier industry is surprisingly at +9%. Strong growth was also recorded in the previous months. Eurostat’s headline statement focuses only on the change from August to September 2019, when industrial production in the Eurozone grew by 0.1%. That is little to not at all meaningful, so we would like to note! Here are more details from Eurostat in the wording:

In the Eurozone, production of intermediate goods fell by 3.9%, energy by 2.6%, capital goods by 1.4% and durable consumer goods by 0.8% in September 2019. This data compared with September 2018, while production of consumer goods increased by 1.6%. In the EU28, intermediate goods decreased by 3.3%, energy by 2.8% and capital goods by 1.0%, while durable consumer goods increased by 0.7% and non-durable consumer goods by 2.4%.

The following chart shows the development of industrial production for the Eurozone and the EU as a whole since 2010.

Great Britain with price data

Several very important price data were released today from Great Britain. The trend is weak. Consumer prices rose by only 1.5% year-on-year in October with expectations of 1.6% and previously 1.7%. Retail prices rose by 2.1% after 2.4% before. And now comes the most important thing. Import producer prices fall by 5.1%! According to British statisticians, oil has contributed the most to this. This can probably be explained by the fact that the British Pound rose from 1.22 to 1.30 against the US Dollar in October. As a result, British importers were able to buy goods in US Dollars at lower prices. Do we therefore see a muted increase in consumer prices in the UK in the coming months?

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