Industrial output expands at fastest pace since November 2020 in March

Latest reading: Industrial output increased 2.6% month-on-month in seasonally adjusted terms in March (February: +1.1% s.a. mom). The print marked the best reading since November 2020. Looking at the details of the release, output for capital goods, durable consumer goods and non-durable consumer goods gained steam. These sectors benefited from frontloading ahead of U.S. tariffs. On the flip side, energy output shrank. On an annual basis, industrial production increased 3.6% in March, which was significantly better than February’s 1.0% expansion and marked the best result since September 2022. Moreover, the trend improved notably, with the annual average variation of industrial production coming in at minus 1.5% in March, up from February's minus 2.1%.

Panelist insight: ING’s Bert Colijn commented on the outlook: “Eurozone manufacturing seems to have experienced a Cinderella moment in the first quarter. But when the clock struck Liberation Day, it is likely that eurozone ballgowns turned back into rags. In other words, we expect weakening demand for eurozone products to be a theme again, thanks to tariffs and large economic uncertainty. This means that while the manufacturing sector has seen a remarkable upturn in the first quarter, we don’t think this is sustainable.”

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