Euro-Area Manufacturing Struggles; 3Q Growth Moderate: Barclays
(Bloomberg) -- Decline in July euro-area industrial production was broad based, primarily driven by weakness in Germany, with 3Q to post only moderate growth, Barclays economist Apolline Menut writes in a client note.
- Most recent business surveys showed continued weakness in forward-looking components, suggesting the IP probably won’t gather significant traction in the months ahead
- Weak global demand, recent EUR appreciation and heightened geopolitical risks will pose headwinds to euro area IP and GDP
- Capital goods fell sharply, consumer goods shrank, energy production decreased for third month in a row and manufacturing contracted driven by sharp fall in motor vehicle production
- Weakness in German IP will persist in 3Q; France fell for third straight month which, together with disappointing July household consumption data, poses downside risks to 3Q GDP
- Dutch IP also weighed on euro area aggregate, although Italian, Spanish and Irish readings had less negative impact
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HALISTER1Source: BFW (Bloomberg First Word)
Tickers 2539Z GR (European Central Bank)
People Apolline Menut (Barclays PLC)
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