Weak(ish) August industrial production

A quick, English-language précis of Javier's post on today's industrial production data.

August industrial production comes in at a disappointing +0.6% on a year-on-year basis, pointing to a possible 3rd quarter drop of the same magnitude (depending on the September figures).

Although mitigated by positive industry employment statistics, this doesn't bode well for the next release of the quarterly GDP.

It's worth noting that the biggest drag on the IPI came from the capital goods and energy sectors. The former, being very volatile by nature, may or may not indicate some larger trend. But electricity consumption is very much worth mentioning.

Briefly, the Instituto Nacional de Estadística does not correct electricity use for temperature. But REE, the national electricity transmission network does, and the effects of this summer's unusually low temperatures (and the shorter working month) are quite evident in the table above. Real elecrical demand stemming from economic activity was, in fact, slightly positive.

The chart clearly shows the divergence between IPI and IPI ex-energy over the recent period. Still weakening, in any case, but not to the extent that the headline figures indicate.

Javier García Echegaray, Anglo version by CB.