German and Spanish industrial production dip in August; Up in UK
German and Spanish industrial production dipped in August but it rose in teh UK boosted by a jump in oil and gas production and a moderate rebound in manufacturing.
In August 2015, production in German industry was down by 1.2% from the previous month on a price, seasonally and working day adjusted basis according to provisional data from Destatis, the federal statistics office, on Wednesday. In July 2015, revised data shows a rise of 1.2% (primary +0.7%) from June 2015.
In August 2015, production in industry excluding energy and construction was down by 1.1%. Within industry, the production of capital goods decreased by 2.1% and the production of consumer goods by 0.4%. The production of intermediate goods remained at the same level of the previous month. Energy production fell by 1.4% in August 2015 and the production in construction decreased by 1.3%.
Destatis on Tuesday reported that price-adjusted new orders in manufacturing in August 2015 fell a seasonally and working-day adjusted 1.8% on July 2015. In July 2015, the drop on the previous month showed a corrected –2.2% (primary –1.4%). In August 2015, domestic orders fell 2.6% and foreign orders 1.2% on the previous month. As regards the direction of trade in foreign transactions, new orders from the Euro Area were up 2.5% on the previous month, new orders from other countries plunged 3.7%.
In Spain, production fell in August at the fastest pace since April 2013, the National Statistics Institute said on Wednesday. The single currency's fourth-largest economy may have lost momentum in the third quarter, according to the Bank of Spain, which estimates that growth slowed to 0.8% from 1% in the previous period.
UK industrial production rose 1% from July, when it had dipped 0.3%, the Office for National Statistics said in London on Wednesday.
“The Bank of England is likely to take some comfort from August's rebound in industrial production, but it will be concerned by the underlying weakness of manufacturing,” said Howard Archer, an economist at IHS Global Insight in London. “The data are unlikely to hugely change market belief that the BOE will not be raising interest rates before late-2016, although we believe a move in the first half of the year is still very likely and would not rule out a move in February.”
“Weakened manufacturing activity is worrying for hopes that UK growth can become more balanced and less dependent on the services sector and consumer spending,” Archer said.
Industrial production rose 1% between July and August, and 1.9% compared with a year ago. Output in mining and quarrying as a whole rose almost 18% year on year.
The UK manufacturing sector expanded on a monthly basis by 0.5% in August, following a 0.7% dip in July. However, output was 0.8% lower than a year ago and 6.5% below the pre-crisis peak.