Eurozone: Weak industrial production data to impact growth - ING

Peter Vanden Houte, Chief Economist at ING, suggests that weak industrial production figures of Eurozone point to some growth deceleration in the first quarter and it seems as if GDP growth is already past its peak.

Key Quotes

“After a 0.6 % month-on-month decline in January, industrial production fell a further 0.8% in February. That said, year-on-year growth was still 2.9%. With both the PMI and the European Commission’s economic sentiment indicator having eased further in March, it doesn’t look as if industrial production figures for March are going to surprise on the upside.”

“It seems as if the upbeat economic figures for the Eurozone have left for a Spring break vacation. Indeed, as most indicators have undershot expectations over the past two months, the risk of a growth deceleration in the first quarter is now very real. To be sure, we still believe that 1Q GDP growth will come out close to 0.5%, but the growth momentum is clearly slowing. As the stronger euro might start to bite and the spectre of a trade war could weigh on business confidence, a growth acceleration is definitely not in the cards. As a matter of fact, we expect the Eurozone’s growth pace to fall below 2.0% on an annual basis in the course of 2018.”