Look to the Skies to Discover How Europe’s Economy is Faring

(Bloomberg) -- European industry may be recovering at a slower pace than some surveys suggest, according to pollution data tracked by Citigroup Inc.

While both France and Germany, the euro area’s largest economies, are improving, emission levels indicate that manufacturing output is still as much as 15% below its year-earlier levels. The U.K. and Italy, among the hardest hit by the coronavirus, are both further behind.

“These findings contrast with the somewhat more optimistic indications that stem out of expectation surveys,” the analysts said in the report.

The pollution indicators for the U.K. show a potential year-on-year decrease of 20% in June. The situation for Italy is starker, at 30%. A broader measure of activity by Bloomberg Economics also shows a slower rebound for Britain, which was late to lockdown and relatively late to reopen.

The overall report offers a less positive picture of the economy than might be interpreted from some surveys of sentiment and activity. Citi noted a pickup in euro-area industrial production expectations in June, saying they are “more optimistic than what pollution data seems to suggest.”

The coronavirus pandemic has disrupted traditional ways of measuring the economy, challenging economists’ creativity in finding new ways of getting up-to-date numbers on the rebound.

While conventional indicators usually take weeks or even months to report, energy usage, restaurant bookings and patterns of movement have all helped to produce daily numbers in this new environment.

Eurostat will publish industrial production data for May next week. Output fell by 17% in April alone.

©2020 Bloomberg L.P.