Eurozone Industrial Output rebounded in August

Industry figures for the single currency area could bring third-quarter economic growth in the 19-country Euro zone. European Union statistical agency Eurostat said output climbed 1.6% on the month on a seasonally adjusted basis and rose 1.8% from a year earlier, after contracting by 0.7% and 0.5%, respectively, in July. Moreover, the increase outperformed expectations of a 1.4% rise and the annual advance of 1.8% was also above consensus forecasts. Although, the solid recovery has demonstrated German production for August with output rising 2.5% on a monthly pace, while new orders also strengthened and there was a robust recovery in exports. 

Overall the jump in production is unlikely to remove concerns among policy makers over the impact of Brexit on the Euro zone economy.  The industrial figures also have a tendency to be volatile, thus economists are careful not to read too much into one month's data. Few economists are expecting a return to the healthy first-quarter tick anytime soon even after the industrial production figures. 

Capital Economics European economist Jack Allen noted that the 1.6% monthly output growth came from a stronger-than-expected July base, "Industry is unlikely to have provided a large boost to GDP in Q3," Allen noted. "Given the usual lag, industrial production might have declined again in September. And even if it flat-lined, the increase in industrial output in Q3 as a whole will have provided only a small contribution to GDP growth in Q3, just as it did in Q2."