Industrial output falls at sharpest pace since July 2023 in April

Latest reading: Industrial output declined 2.4% in month-on-month seasonally adjusted terms in April, which contrasted March's 2.4% increase. April's figure was below market expectations and marked the worst reading since July 2023. The sharp contraction came on the heels of front-loading in Q1 ahead of greater U.S. tariffs on EU goods from 2 April. Looking at the details of the release, the deterioration was broad-based and reflected fresh declines in the production of intermediate goods, capital goods, durable consumer goods and non-durable consumer goods. Moreover, energy output fell at a steeper rate. In terms of specific countries, Ireland posted a double-digit contraction in April after heavy front-loading in February and March, while France, Germany and Spain also saw declines. That said, Italian factory output rebounded in April. On an annual basis, factory output rose at a more moderate pace of 0.8% in April (March: +3.7% yoy). Meanwhile, the trend improved, with the annual average variation of industrial production coming in at minus 1.1%, up from March's minus 1.5%.

Panelist insight: ING’s Carsten Brzeski commented: “US tariffs and again highly elevated geopolitical risks provide reasons enough against any premature optimism. However, more fundamentally speaking, it looks like eurozone manufacturing has been bottoming out. The announced German fiscal stimulus, as well as European defence spending, have both added to order books and general optimism. But there's more. After huge stockpiling in 2021 and 2022 and high inventories limiting production since then, the inventory cycle is showing the first signs of turning. Even though it's not happening yet in all eurozone countries, it is most pronounced in Germany. Still, it is the combination of inventory reduction and improving order books that will boost production in the future.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects European industry projections for the next ten years from a panel of 13 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable industry forecast available for European industry.

Download one of our sample reports to visualize what a Consensus Forecast is and see our European industry projections.

Want to get access to the full dataset of European industry forecasts? Send an email to info@focus-economics.com.