Industry in Eurozone

Eurozone - Industry

Industrial output slumps in December

Industrial output dived a seasonally-adjusted 2.1% over the previous month in December, following November’s flat reading. The reading surprised market expectations on the downside.

December’s print was weighed down by a sharp downturn in the production of capital goods, a dip in the production of energy and faster contractions in the production of intermediate and non-durable consumer goods. Meanwhile, the production of durable consumer goods dropped at the same pace recorded in the previous month.

Looking at the individual economies for which data is available, industrial production fell in 10 countries in December, including heavyweights Germany, France, Italy and Spain. On the flip side, it rose in Finland, Greece and Portugal.

On an annual basis, industrial production plunged 4.1% in December, a sharper contraction than November’s 1.7% drop. Lastly, annual average variation in industrial production inched up to minus 1.7% from October’s minus 1.8%.

Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:

“While some had expected a bottoming out to happen towards the end of the year, these December numbers actually show a deepening of the industrial recession [and] uncertainty about the impact of the coronavirus on the global supply chain has put a spanner in the works. While it is very difficult to estimate the impact of the virus on European production, it is likely to delay and subdue the recovery of industrial production somewhat more.”

FocusEconomics Consensus Forecast panelists see industrial production rising 0.8% in 2020, which is unchanged from last month’s forecast. For 2021, panelists see industrial production expanding 1.2%.