Euro Zone Industrial Production Decline

FRANKFURT (Reuters) – Euro zone industrial production saw a larger than expected decline in September, with Germany experiencing the steepest drop among major nations. This suggests that the anticipated recovery may be delayed further.

Industrial production decreased by 2.0% compared to the previous month, surpassing a 1.4% drop predicted in a Reuters poll of economists. Furthermore, the solid 1.8% growth reported for the previous month was revised down to just 1.5%, according to data from Eurostat released on Thursday.

When compared to the same month last year, output fell by 2.8%, which was worse than the 2.0% drop forecasted by economists, indicating that the year-long industrial recession is deepening.

Output in Germany, the largest economy in the 20-nation bloc, dropped by 2.7% from the previous month, while France and Italy also reported declines.

The most significant drop was in capital goods output, but energy production also decreased, and growth in other sectors was insufficient to mitigate these losses.

Industrial production had been steadily rising after the pandemic until the end of 2022 but has been trending downward ever since due to weak demand from China, poor performance in the automotive sector, and soaring energy costs.

These figures are likely to strengthen arguments that the euro zone's long-awaited economic recovery is becoming increasingly elusive, with any potential rebound expected to be shallow due to structural issues within the economy.