IP Is Mixed across EMU in September

Industrial production in September was mixed across the 12 early reporting members of the European Monetary Union (EMU). Output fell on the month in Ireland, the Netherlands, Germany, Greece, France, and Finland, a diverse group of EMU members. At the same time, output was reported stronger in Spain, Portugal, Malta, Belgium, Italy, and Austria. The median change in September was for a decline of 0.2 percentage points; that fall follows a median change of zero in August versus an increase of 0.5% in July.

Looking over broader periods from 12-months to six-months to three-months, median output falls over 12 months by 0.5%, it falls by 2.2% over six months, and it falls by 0.5% over three months. The medians of the annual rate changes over those various periods remain consistently negative.

Over 12 months compared to 12-months ago, output is accelerating in 77.8% of the reporters. However, over six months compared to 12-months, output accelerates in only 38.5% of the reporters. Over three months compared to six-months, output accelerates in 55.6% of the reporters. While the statistics on acceleration are mixed, there seems to be more of a tendency for output to accelerate than to decelerate over these various timelines. The monthly data similarly show mixed statistics on output acceleration month-to-month for September, August, and July.

By country, output is accelerating over the three sequential broad periods in Austria and in Spain. However, sequentially, output is decelerating in Germany, the Netherlands, Malta, and Greece.

In the quarter-to-date, which is for the completed quarter as of September, output is falling in seven of 12 early reporting European Monetary Union countries. It's rising in the quarter only in Ireland, Belgium, Austria, Finland, and France. Half of the 12 reporting countries show output lower in September 2024 than it was in January 2020, just before COVID struck. Countries with weaker output on this comparison are Germany, Portugal, Spain, Malta, France, and Italy. Note that each of the four largest monetary union countries is on that list.

The final column of the table ranks industrial production output growth for manufacturing on data back to December 2006. Over this period, only four countries are showing year-over-year growth rates stronger than their respective medians over the period. Those countries are Portugal, Greece, Belgium, and Malta. All the rest show percentile rankings below their 50-percentile mark, which puts their respective rates of growth below their historic medians. With rankings in their 44th percentile, Finland and Spain come closest to median results while being below them. But for the rest of the countries on the table, the weakness is much worse, with lower rankings. For example, Germany's growth ranks in its 12.6 percentile, France’s growth registers a 31.3 percentile standing, Italy’s growth has an 18.7 percentile standing. The largest countries in the monetary union have not been performing well.

The September report does not show manufacturing turning a corner, and doing better in the monetary union. It continues to show an uneven performance as well as a great deal of weakness in the area. Both short and longer trends are uneven. The future remains as clouded as ever in an environment still rife with geopolitical conflict.