Eurozone industrial production disappoints in March

Industrial production nudged only marginally higher in the Eurozone at the end of the first quarter, coming in well below forecasts, official data showed on Wednesday.

According to Eurostat, the European Union’s statistics office, industrial production rose by just 0.1% in the Eurozone in March month-on-month, and by 10.9% year-on-year.

Analysts had been looking for a monthly rise of around 0.8% and an annual improvement of 11.8%.

Across the wider EU, industrial production rose 0.6%, or by 11.0% year-on-year.

Eurostat said that production of non-durable consumer goods had improved by 1.9% in March in the Eurozone, while energy was ahead 1.2% and intermediate goods rose 0.6%. But production of capital goods eased 1.0% and consumer goods fell 1.2%.

Germany, the Eurozone’s largest economy, reported a 0.8% rise, while France improved 0.7%. But both Spain and Italy recorded a 0.1% dip.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: “We are a little bit surprised by these data.”

“The main source of the discrepancy seems to come from Spain, where Eurostat is incorporating a 0.1% month-to-month decline, in contrast to the national data sporting a 0.4% increase. In any case, the remaining details suggest that manufacturing firmed at the end of the first quarter, but also that the performance through the quarter as a whole was disappointing.

“Base effects in the auto sector, strong surveys, and reopening point to an acceleration in the second quarter, in part as a lagged response to rising new orders, but we also have to take seriously the idea that the supply-side will remain a constraint to the headline.”

The highest increase across member states in March was seen in Denmark, where industrial production rose 4.9%. The largest decline was in Luxembourg, down 4.4%.