Bankinter | Industrial production and capacity utilisation exceeded expectations in June. Industrial production rose by 0.3% month-on-month in June, compared to expectations of 0.1% and the previous figure of 0.0%. Capacity utilisation stood at 77.6%, compared to expectations of 77.4% and the previous figure of 77.5%. By segment, all areas improved and posted growth in June.
Analysis team’s view: Industrial activity has been positive for three consecutive months, taking advantage of some improvement in trade while tariffs were being negotiated, and there seems to be no reason to expect monetary easing by the Federal Reserve at its next meeting. Uncertainty remains about the outcome of the tariff negotiations on 1 August and the progressive impact on prices, as seen yesterday with the rise in inflation to 2.7%. Therefore, it can be concluded that industrial activity, although better than expected, continues to be affected by tariff uncertainty and the slowdown in consumption.
June Producer Price Index (PPI) figures were also published, coming in below expectations: up 2.3% year-on-year against 2.5% expected and 2.7% previously (revised from 2.6%). The underlying rate (excluding energy and food) was also lower than expected: 2.6% year-on-year against 2.7% expected and 3.2% previously (revised from 3.0%).
Opinion: Industrial prices in the US, despite moderating from their highs at the beginning of the year (when they stood at 3.8%), remain high and point to potential increases in global price pressures in the current geostrategic environment. These higher production prices also point to a gradual pass-through to final consumer prices.
