What Last Week's Indicators Say about Health of Economy

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Part 6
What Last Week's Indicators Say about Health of Economy PART 6 OF 7

Eurozone Industrial Production Rose Sharply

Eurozone industrial production

According to Eurostat data, Eurozone industrial production (VGK) (IEV) (EZU) output rose 1.3% in May 2017 as compared to a 0.3% gain in April 2017. May production beat the market expectation of a 1.1% gain.

Eurozone Industrial Production Rose Sharply

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The higher industrial production in May was mainly due to the higher production of nondurable consumer goods, durable consumer goods, intermediate goods, and capital goods. Key categories of industrial production growth saw the following increases in May:

  • Capital goods production rose 2.3%.
  • Non-durable consumer goods production rose 1.2%.
  • Durable consumer goods production rose 1.8%.
  • Intermediate goods production rose 0.3%.

Major industrial sectors such as manufacturing, mining, and utilities saw significant production output in May.

The strong rise in industrial production indicates that both the domestic demand and international demand (ACWI) (VTI) rose in May 2017. Among the major nations of the Eurozone, Germany (EWG) posted strong manufacturing activity during the month. All these activities strengthened investors’ sentiment towards the Eurozone economy, which has weakened significantly in the past few years.

Performances of various ETFs in May

The iShares MSCI Eurozone (EZU), which tracks the performance of the Eurozone, rose 4.2% in May 2017. The Vanguard FTSE Europe ETF (VGK) rose nearly 4.5% in the same month.

In the next part of this series, we’ll see which indicators investors should look at next week.


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