Industrial production in the Eurozone declined in July

Eurozone monthly industrial output fell in July, the biggest drop since the early months of the COVID-19 pandemic, as rising inflation and fears of a looming recession prompted firms to cut output, according to new data released on Wednesday by the European Commission's statistics agency (Eurostat).

Output of industrial companies in the region fell by 2.3% month-on-month, reversing June's gain of 1.1% and below forecasts for a 1.0% decline. This was the biggest decline since April 2020. On an annual basis, industrial production unexpectedly declined by 2.4%. Economists had expected this figure to show a marginal increase of 0.4%. In particular, factories produced fewer capital goods or assets such as vehicles or buildings, the output of which fell by 4.2%. Analysts at ING noted that this decline was mainly due to a nearly 19% drop in industrial production in Ireland. Output of consumer durables such as bicycles and televisions and intermediate goods such as sugar and glass also declined. However, these declines were partly offset by increases in energy and non-durable goods, including food and clothing. On a country-by-country basis, three of the Eurozone's four largest economies - Germany, France and Spain - recorded significant declines in industrial production, while Italy and the Netherlands saw small increases. "The outlook for the coming months remains relatively bleak. The energy crisis has started to result in production disruptions across the Eurozone for the most gas-using producers, and other supply issues have eased but not disappeared." Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!