Euro Area Industrial Production

October 14, 2009

Industrial output rebounded at a 9.8% annualized rate in Euroland during the middle third of 2009, that is over the four months between April and August, yet production was still 15.4% lower in August than a year earlier in August 2008.  That’s because production plunged at annualized rates of 32.1% in the final third of last year and 18.7% in the first third of this year.  Euroland’s biggest three economies experienced a stronger recovery in May-August than the bloc as a whole, but output continued to contract in Spain and reverted to a negative direction in Ireland.  The table below expresses production growth in annualized terms during the last three 4-month intervals for Euroland, Germany, France, Italy Spain, and Ireland. As policymakers, ECB officials needn’t take action against the brisk pace of recovery.  As quick as such has been, considerable excess capacity remains.  Moreover, the revival is being amplified by the restoration of depleted inventories and hence will moderate before long.

  August/April April/Dec Dec/August
Euro Area +9.8% -18.7% -32.1%
Germany +21.6% -33.4% -33.0%
France +17.2% -19.1% -24.6%
Italy +31.2% -22.7% -32.2%
Spain -6.9% -9.0% -26.6%
Ireland -19.7% +15.3% -30.7%

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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