The decline in industrial output, led by a sharp drop in Ireland, fell short of expectations and signals sector volatility.
Euro area industrial production contracted by 0.2% month-on-month in May, missing forecasts of a 0.2% gain. The prior month’s reading was revised upward to +0.3% from +0.1%.
Ireland’s output plunged 5.2%, echoing January’s 10.2% drop, driven by volatility in pharmaceuticals and technology. Excluding energy, the decline in May appears steeper, though the data remains lagging and unlikely to sway ECB policy.
Markets have fully priced in a 25 bps rate hike for September, with 42 bps of tightening expected by year-end.