ECB’s Economic Bulletin: Monetary policy shocks have greater impact on manufacturing than services

The latest study conducted by the European Central Bank (ECB) assessed the impact of the rising interest rates on the Eurozone’s services and manufacturing sectors’ activity, according to the central’s Economic Bulletin published on Tuesday.

Key takeaways

"The dynamics in manufacturing contain information relevant to the near-term dynamics in services, and thus for the rest of the economy,"

"Manufacturing appears to lead services... whereas no clear leading relation can be established in the other direction."

“The overall impact of the downturn on services is likely to be smaller.”

"Monetary policy shocks have an impact on manufacturing that is almost twice as strong and around two quarters faster than their impact on services.”