Following the sharp drop of 3.0% m/m in May, manufacturing production rose by 1.0% m/m in June. This was weaker than we had expected but not too far from consensus. Order intake rose in June but is still down over the year.
The trend in manufacturing industry remains weak despite the uptick in June, and there’s no recovery at all taking place so far. This is weaker than other indicators. For instance, companies signal an increase in production as well as in order intake according to various business surveys, but there is still no turnaround in hard data.
Developments in the service production are more encouraging. Production dropped in May and stayed almost flat in June, but the trend is still healthy as production rose swiftly in the previous months. The year-on-year figure was a decent 2.6% in June.
One should not draw too strong conclusions as for revisions of Q2 GDP. The very volatile production data have been poor indicators for GDP. However, our instant view is that the June production figures don’t indicate any need to revise the Q2 GDP flash estimate at 0.2% q/q and 1.9% y/y.
Details, June
Manufacturing
Production y/y: -1.1% (Nordea 0.0%, consensus -0.7%; prior -1.9% revised from -2.2%)
Production m/m: 1.0% (Nordea 2.5%, consensus 1.5%; prior -3.0% revised from -3.2%)
Order intake y/y: -0.5% (prior -0.9 %)
Order intake m/m: +2.2% (prior -2.3%)
Private services sector
Production y/y: 2.6% (Nordea 2.8%; consensus 2.8%, prior unrevised from 1.7%)
Production m/m: 0.1% (Nordea 0.0%; consensus 0.2%; prior unrevised from -1.0%)
Nordea