Euro area industrial output likely to have recovered in August

Euro area’s industrial output is expected to have rebounded in August, indicating towards strong growth in the third quarter. In the prior month, industrial output in the currency bloc dropped 1.1 percent sequentially. The decline was predominantly driven by declines in France and Germany that registered a drop of 0.6 percent and 1.5 percent respectively.

But, based on the batch of national numbers, which account for 90 percent of overall production, industrial output is expected to have rebounded 1.7 percent sequentially in the month, stated Societe Generale in a research note.

Germany’s industrial output rose 3.1 percent sequentially, while, France, Italy and Spain also recorded strong rise of 2.1 percent, 1.7 percent and 1.4 percent respectively. If output is assumed to have remained the same in September, this might lead to a carry-over effect of 0.4 percent quarter-on-quarter in the third quarter. The odds that the third quarter economic growth of euro area coming in above 0.3 percent are rising, added Societe Generale.