Seasonally and calendar-adjusted industrial production contracted by -0.7% m/m in September, the first m/m decline since April 2013. In y/y terms, calendar-adjusted industrial production growth edged up to +5.4%, taking output growth in Q3 to +6.1% y/y, which marks a slowdown from +6.8% y/y in Q2. Similarly, seasonally and calendar-adjusted real retail sales decreased by -0.6% m/m in September, after -0.7% m/m in August, taking the y/y growth rate down to +4.9% in September and an average +6.1% in Q3 (the latter followed +7.2% y/y in Q2). Meanwhile, today released business tendency indicators for October point to a weakening business climate in manufacturing (4.8 points, down from 8.8 in September), construction (1.5, down from 4.0) and wholesale trade (8.9, down from 12.8) while an improvement was registered in retail trade (13.6, up from 12.2). Overall, these high frequency indicators suggest that the economic momentum is moderating but remains robust for now. Euler Hermes expects real GDP growth to slow from an average +5.1% y/y in H1 to +4% in H2, resulting in full-year growth of +4.6% in 2018 (after +4.7% in 2017). The tentative forecast for 2019 is +3.5%.
