May: +0.9% m/m, +9.4% y/y

BERLIN (MNI) – Industrial output in the Eurozone stayed below
expectations in May, according to data released by Eurostat on
Wednesday.

The 0.9% m/m May rise in production left output 9.4% higher on the
year.

The gain in industry was broad-based across all categories. The
strongest monthly jump was noted in durable consumer goods, which
increased by 2.4% m/m and widened the annual gain to +6.3%. Capital
goods output rose by 1.0% on the month and 8.6% y/y.

Intermediate goods production rose 0.8% m/m and was 14.7% higher on
the year. Energy increased 0.6% on the month, slightly widening the
annual increase to +5.7%. Non-durable consumer goods production also
rose 0.6%, bringing the annual change to +3.7%.

Industrial output in Germany rose 2.9% on the month, leaving
production up 13.1% on the year.

German manufacturing orders against expectations fell 0.5% in May,
while the April gain was revised up to +3.2%. Analysts still see the
industrial sector on a sustained upward trend, with the main growth
driver being foreign demand.

The German Industry will reach its pre-crisis level already by
mid-2011 again, Martin Kannegiesser, the president of the Gesamtmetall
metalworking and engineering employers association, said in a newspaper
interview published over the weekend.

Industry output in France rose 1.9% on the month in May, dampening
the annual change to +8.4%. Italian production grew at 1.0% on the
month, giving an annual figure of +7.3%. In Spain, industrial output
lost ground, slipping 0.3% on the month, but still leaving production up
3.3% on the year.

Germany’s Ifo economic research institute together with France’s
Insee and Italian’s ISEA institute earlier this month forecast economic
prospects in the Eurozone to remain subdued.

The three institutes predicted quarterly Eurozone GDP to accelerate
to +0.5% in Q2 and then to decelerate to +0.3% and +0.2% in Q3 and Q4,
respectively.

Fading fiscal stimulus, the still restrictive credit conditions and
increased financial market uncertainty following the recent
sovereign-debt crisis will weigh on growth in H2, they reckoned.

After the strong increase by 4.1% in Q1, industrial production in
the Eurozone is likely to lose momentum through 2010, the three
institutes asserted, noting that the current business climate is still
below its historical average.

ECB President Jean-Claude Trichet said last week that recent data
and surveys point to a pick-up in Eurozone activity in Q2 and should
dispel fears of any relapse into recession.

“The second quarter in the euro area is likely to be much better
than Q1,” Trichet said. “Industrial production, industrial new orders
that we had seen in the last monthly data were very good, obviously,” he
remarked.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$XDS$,MT$$$$,M$X$$$]