In a surprising turn of events, industrial production in the euro area and the European Union saw a notable decline of 2 percent month-on-month in September 2024, as revealed by the latest Eurostat estimates. This marks the first significant pullback following a rise in August, where production had demonstrated a positive growth of 1.5 percent in the euro area and 1.2 percent in the EU.
Looking at year-over-year comparisons, the situation appears even more concerning, with production in the euro area dropping by 2.8 percent compared to the previous September, while the EU experienced a 2.4 percent decrease. These figures highlight a continuing trend of softening industrial output, as various sectors grapple with shifting market conditions.
Diving deeper into the specifics, September saw the euro area’s industrial production flatlining for intermediate goods. However, there were declines across several categories: energy production fell by 1.5 percent, capital goods saw a sharper decrease of 3.8 percent, while durable consumer goods gained slight traction with a 0.5 percent increase, and non-durable consumer goods rose by 1.6 percent.
In the EU, the overall sentiment mirrored this mixed approach, with intermediate goods slipping by 0.1 percent, energy falling 1.6 percent, and capital goods down by 3.2 percent. On a brighter note, durable consumer goods grew by 0.3 percent, and non-durable goods edged up by 0.5 percent.
Country-wise, Ireland bore the brunt of the declines with a staggering 10.7 percent drop, followed by Denmark with a 5 percent dip, and the Netherlands down by 2.9 percent. Conversely, Croatia exhibited resilience with a robust 5.8 percent increase, alongside Portugal and Slovenia registering gains of 2.7 percent and 1.6 percent, respectively.
On the annual front, from September 2023 to September 2024, intermediate goods production in the euro area fell by 2.6 percent, while energy production increased by 1.9 percent. Capital goods were notably hard hit, declining by 6.4 percent. Durable consumer goods dropped by 1.7 percent, contrasting with a significant gain of 4.8 percent in non-durable consumer goods.
In the EU context, similar trends were observed with intermediate goods down by 2.5 percent, energy up by 1.4 percent, and substantial decreases in capital goods and durable consumer goods. However, non-durable consumer goods saw an uptick of 4.5 percent.
The sharpest annual declines were recorded in Ireland at 7.3 percent, followed closely by Luxembourg at 6.3 percent, and Hungary at 5.3 percent. On the flip side, Denmark led with a remarkable 7.8 percent increase, followed by Belgium and Lithuania, which saw growths of 6 percent and 3.5 percent, respectively.
As various regions within the euro area and the EU navigate these fluctuating industrial landscapes, both challenges and opportunities lie ahead, emphasizing the need for strategic approaches to counteract the downward trends observed in recent months.
