Euro area industrial production likely to have declined in May

Industrial output is expected to have declined in May, following a rise in April. According to a Societe Generale research report, the euro area industrial production is likely to have come in at -1.2 percent on sequential basis, reversing April’s rise of 1.1 percent month-on-month.

Industrial production of Germany was quite weaker than anticipated in May at -1.3 percent month-on-month. The decline was driven by drops in consumer durables and capital goods.

Meanwhile, manufacturing in France remained stable; however, the overall output dropped 0.5 percent as refinery shutdowns in May resulted in declines of energy production. Refined petroleum, and coke products dropped 23 percent on sequential basis.

Given that this is a temporary factor and the manufacturing PMI of Germany rebounding to an 18-month high of 54.5, output in the euro area is expected to rebound in June, noted Societe Generale.

“Nonetheless, we are tracking IP below our forecast of 0.3 percent qoq GDP growth in Q2,” added Societe Generale.