The only release of note from the eurozone yesterday was the industrial production figures for December 2018. In the previous period, there was a downwardly revised 3% contraction and this time around a drop of 3.2% was expected by the markets. However, it came in even worse than that by slumping some 4.2% from a year earlier. Among the larger economies in the eurozone, Spain posted the largest decrease, with Italy, Germany and France – in that order – coming just behind.
Month-over-month, industrial production in the eurozone dropped by 0.9% from the previous month, which was worse than the 0.4% expected. The figures show that European manufacturers are being affected by a range of problems across Europe and further afield. Trade wars continue to have a negative impact, but so too do continuing Brexit uncertainty and emission standard-related production delays. These are worrying times for the eurozone and you do have to wonder when the raft of disappointing economic data will reach the bottom.
Today is an important day, with German and euro area GDP growth rate figures for the fourth quarter of 2018 on the schedule. We will also see the preliminary estimate of the eurozone’s employment change figures for the same period. If the growth figures disappoint then the eurozone could find itself in a crisis of sorts. They could really do with some positive news, but where it is going to come from is currently unknown.