The latest industrial production data for the European Union indicates that industrial activity “may be stabilising” in the bloc, following a decline that has persisted since 2023, ING has said.
Bert Colijn, chief economist, Netherlands, at ING was commenting following Eurostat data that indicated that industrial production was ‘stable’ in the euro area in January, compared with the same period the previous year. Across the EU, production fell by 0.2% on a year-on-year basis.
On a month-on-month basis, meanwhile, industrial production increased by 0.8% in the euro area and by 0.3% in the EU.
‘Highest since August’
“The January production level was the highest since August last year and has been mainly driven by stronger capital and intermediate goods production while energy and consumer goods production posted declines,” Colijn commented.
“Surveys have recently become less negative about the eurozone manufacturing sector, although there is little to cheer about for now.”
Across the EU, intermediate goods production increased by 1.5% in January, while capital goods rose by 0.1%. Energy production decreased by 2.0%, however, while durable consumer goods declined by 0.3%, and non-durable consumer goods fell by 4.1%.
On a country-by-country basis, the biggest annual increases in industrial production were reported in Ireland (+10.4%), Lithuania (+9.8%) and Croatia (+7.6%) in January, with Slovakia (-5.1%), Denmark (-4.4%) and Hungary (-4.0%) seeing the biggest declines.
Outlook shifting
“The outlook for industrial production is shifting, but the question is when real relief is going to come,” Colijn added. “In recent weeks, more pan-European defence spending and German infrastructure investment have become likely. At the same time, these investments typically require time before their impact is reflected in the numbers.
“For 2025, a large rebound seems unlikely although some early investments could come through. Overall, the light at the end of the tunnel has become stronger, but the question of when the end will be reached remains as unclear as ever.” Read more here and here.
