Seasonally adjusted euro area industrial output fell 0.5% from July to August, according to the first estimate. Output had also declined in July. Compared with August a year earlier, the index was 1.1% lower. Both the short-term comparison and the year-on-year reading therefore pointed to weaker overall production.
The product breakdown was less uniform. Output of capital goods rose 0.4% from July, whereas production of non-durable consumer goods fell 2.7%. The decline in the overall index therefore does not mean that equipment for businesses and everyday goods for consumers experienced the same change in production.
Production and sales also need to be kept separate. A machine can be delivered in a different month from the one in which it was built, and manufacturers can temporarily meet orders from inventories. Orders and stock levels are therefore useful companions to the output index when assessing demand. The August reading alone establishes neither a decline in revenue nor a change in profit margins.