Zero growth for industrial production in the Eurozone and the recovery is not yet visible. The October data released by Eurostat show a zero increase on a monthly basis, in line with market expectations and an improvement compared to the 1.5% decline recorded in September. However, on an annual basis, production decreased by 1.2%, a less negative figure compared to -2.2% in September and better than analysts’ forecasts, which estimated a drop of 1.9%. But the fragility of the production system is there for all to see.
The trend in industrial production between the various Eurozone countries highlights a clear divide. Germany, France and the Netherlands reported negative monthly data, Italy recorded a month of stagnation, while Spain stood out as the only country with positive growth. These mixed results indicate that the industrial sector has not yet found a common recovery trajectory. Structural and economic factors weigh heavily: still high energy costs, weak demand from China, the increase in the cost of financing for new investments and increasingly prudent domestic consumer spending.
In the 27-member European Union, the data appears slightly more encouraging. On a monthly basis, industrial production rose 0.3% after falling 1.4% in September, signaling some resilience. On an annual basis, the decline was 0.8%, less severe than the previous month’s -1.8%. This gap between the Eurozone and the EU27 probably reflects the influence of countries outside the euro area that have shown greater adaptability to an unstable economic context.
At a sectoral level, the data indicates a decrease in production of energy, durable goods and consumer goods, highlighting a contraction in domestic demand and greater vulnerability to fluctuations in energy costs. The only growing segment was capital goods.
The fragility of European industry has also been highlighted by the European Central Bankwhich yesterday cut interest rates again to stimulate the economy and revised its growth forecasts downwards. Despite the annual decline being less severe than expected, the signs in October do not suggest an immediate recovery. The main challenge remains that of addressing the structural obstacles, to emerge from a production weakness of over two years.
