In June 2008, seasonally adjusted industrial production1 remained unchanged in the Eurozone2 (EA15) and grew by 0.1% in the EU272. In May3 production fell by 1.8% and 1.3% respectively. Meanwhile, the Ifo Economic Climate in the Eurozone has worsened again in the third quarter of 2008 for the fourth time in succession. The decline in the Ifo indicator is both the result of less positive assessments of the current economic situation as well as clearly more pessimistic expectations for the coming six months.
The economic climate has further clouded over in nearly all countries of the Eurozone in the third quarter of 2008. Particularly negative assessments of the current economic situation have come from Italy, Spain, Portugal, Ireland and Belgium. Favourable assessments of the current situation continue to come from Finland, Austria, Germany and the Netherlands, however. In the opinion of the WES experts, the slowing in economic activity will continue in all countries of the Eurozone in the coming six months.
At 3.6%, the inflation expectations exceed the ECB target even more so than at the beginning of the year (2.5%). In contrast to the previous survey, the WES experts anticipate an increase in key lending rates in the course of the come six months.
The US dollar is assessed as undervalued vis-à-vis the euro. In the coming six months, a slight strengthening of the US dollar is expected. Also the Japanese yen and the British pound are seen as undervalued vis-à-vis the euro.
TheIfo World Economic Survey (WES) investigates world-wide economic trends by polling transnational as well as national organisations in different countries. This allows for a rapid, up-to-date assessment of the economic situation prevailing around the world. The full set of results will be published on 20 August 2008.
The 3rd quarter 2008 Eurozone results, which are published here in advance, are based on the responses of 273 economic experts. WES* (see bottom of page) is conducted by the German Ifo Institute for Economic Research in co-operation with the International Chamber of Commerce (ICC) in Paris.
Industrial Production
In the year to June 2008, industrial production decreased by 0.5% in the Eurozone and by 0.3% in the EU27.
Monthly comparison
In June 2008 compared with May 2008, production of energy increased by 1.0% in the Eurozone and by 0.6% in the EU27. Non-durable consumer goods grew by 0.9% and 0.7% respectively. Durable consumer goods fell by 0.1% in the Eurozone and by 0.4% in the EU27. Intermediate goods declined by 0.2% in the Eurozone, but remained stable in the EU27. Capital goods decreased by 0.4% and 0.3% respectively.
In June 2008, among the Member States for which data are available, industrial production rose in eleven and fell in ten. The highest increases were registered in Portugal (+3.0%), the Netherlands (+2.9%) and Poland (+2.8%), while the largest falls were recorded in Ireland (-5.3%), Denmark (-3.7%) and Bulgaria (-2.4%).
Annual comparison
In June 2008 compared with June 2007, production of capital goods increased by 1.4% in both zones. Non-durable consumer goods fell by 0.6% in the Eurozone and by 0.7% in the EU27. Energy declined by 0.8% and 0.3% respectively. Intermediate goods decreased by 1.1% in the Eurozone and by 0.9% in the EU27. Durable consumer goods fell by 5.3% and 3.7% respectively.
In June 2008, among the Member States for which data are available, industrial production rose in twelve and fell in nine. The highest increases were registered in Poland (+7.3%), Slovakia (+6.3%) and Ireland (+6.1%), while the largest decreases were recorded in Spain (-9.0%), Latvia (-5.2%) and Estonia (-4.7%).
1. Total industry (excluding construction). Eurostat publishes national seasonally adjusted data if available. For the other Member States (Belgium, Bulgaria, the Czech Republic, Greece, Spain, Cyprus and Luxembourg) Eurostat performs the adjustment. This means that different methodologies are used to make the seasonal adjustment of the national series.
The seasonally adjusted Eurozone and EU series are calculated by aggregating the working day adjusted series from individual Member States and performing an adjustment for seasonal effects on these series. Therefore the seasonally adjusted figures for total industry (excluding construction) is based directly on the working day adjusted series coming from the Member States and not on an aggregation of the seasonally adjusted indices from the Member States. The Eurozone and EU seasonally adjusted growth rates might differ from the weighted growth rates of the individual Member States (see Methodology of the industrial production index). This procedure also implies that the aggregation of the overall figures is not based on the published details (intermediate, capital, durable, non-durable goods, energy).
Missing observations from Member States are estimated for the calculation of the Eurozone and the EU aggregates.
2. The Eurozone (EA15) consists of Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia and Finland.
The EU27 includes Belgium (BE), Bulgaria (BG), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Ireland (IE), Greece (EL), Spain (ES), France (FR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United Kingdom (UK).
3. Data of previous months have been revised. The figures for May 2008 were -1.9% in the Eurozone and -1.4% in the EU27 for the monthly changes, and -0.6% in the Eurozone and -0.5% in the EU27 for the yearly changes.
Tables
*Become a Member of the Ifo WES Expert Group!
For more than 20 years the Ifo World Economic Survey (WES) polls economists in managerial or scientific functions in over 90 countries on recent macro-economic developments. As the quality of the survey entirely depends on the active participation and qualification of participants, leading economists are invited to co-operate and to benefit from the fast information about recent economic trends worldwide. Completing the one-page questionnaire takes about 10 to 15 minutes quarterly. As WES Expert you benefit from timely, detailed and exclusive information on current economic developments in about 90 countries! If you are interested to become a member of the Ifo WES Expert Group and to support this unique project, please contact Ms. Stangl (E-mail: Stangl@ifo.de).
