Eurozone industrial production unexpectedly tumbles

13th Mar 2024 09:35

(Sharecast News) - Industrial production fell sharply in the eurozone in January, official data showed on Wednesday, by more than expected.

According to Eurostat, the statistical office of the European Union, industrial production fell 3.2% and by 2.1% across the wider bloc.

That compares to downwardly-revised growth of 1.6% in both areas in December.

Analysts had been expecting a fall of 1.8% in January in the Eurozone.

Year-on-year, industrial production fell 6.7% in the Eurozone and by 5.7% in the EU.

The figures were dragged down by Ireland, which reported a 29% slump in industrial production month-on-month.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: "A drop in industrial output in January was always likely, as a jump in Irish output in December mean reverted. The Irish figures are moved around violently by transfer pricing practices of multinational firms headquartered there.

"That said, it wasn't just Irish output that fell in January. Indeed, output slid in all bar eight Eurozone economies. In other words, distortions aside, we are still not seeing a recovery in the underlying hard data for manufacturing, despite the recent rise in surveys.

"We think this will change soon, but the first quarter will still be awful."

In manufacturing-reliant Germany, Europe's largest economy, output nudged up 0.6%. It rose 0.9% in Spain but fell 1% in France. The Italian figure was not available.

The biggest fall was in capital goods, which saw production tumble 14.5%. Output was down 1.2% for durable consumer goods and by 0.2% for non-durable consumer goods.

It rose, however, by 2.6% for intermediate goods and by 0.5% for energy.