Industrial production in the eurozone unexpectedly fell by 1.5% in January compared to the previous month, while analysts had expected growth of 0.6%. This data was released by the statistical office Eurostat. Declines were recorded in most of the bloc’s largest economies, including Germany, Italy, and Spain. Year-on-year, output fell by 1.2%, while growth of 1.4% had been forecast.
European manufacturing has been stagnating for several years. Current output is approximately 3% below 2021 levels. The sector continues to be pressured by high energy prices, increasing competition from China, US tariff restrictions, low productivity growth, and weak global demand for European automobiles. These factors are systematically undermining the industry’s anticipated recovery in recent years.
The most severe decline is being observed in Germany, the eurozone’s largest economy and the region’s leading automaker. Industrial output is already 9% below 2021 levels, and weak order figures offer little reason to expect a rapid improvement. Further pressure is being created by sharply rising oil and natural gas prices amid geopolitical tensions, which are simultaneously increasing industrial costs and reducing purchasing power in the economy.