Commentary Directory

Euro Area Industrial Production: July 2023

Jacob Hess
September 13, 2023

Euro Area Industrial Production

9/13/2023 (July 2023)

-1.1% MoM (-2.2% YoY)

Below Expectations

Toggle Icon


Capital Goods Production -2.7% MoM (0.4% YoY)
Durable Goods Production -2.2% MoM (-6.7% YoY)

Euro area industrial production fell -1.1% MoM and -2.2% YoY in July, a sharp decline compared to the 0.4% MoM increase in June. Sharp declines in capital goods (-2.7% MoM) and durable goods (-2.2% MoM) production offset slight gains in intermediate goods production (0.2% MoM) and non-durable goods production (0.4% MoM). Interestingly, the big decliners on the month have starkly different annual declines with capital goods production still up 0.4% YoY and durable goods production down -6.7% YoY.

From Eurostat

Industry is now heavily running against growth in Europe. For about a year now, production was volatile as inflationary pressures, especially energy costs, created a complicated environment for manufacturing. Though those pressures have eased to an extent, rising interest rates is now having a clear impact on manufacturing firms and their expectations of demand. This is especially the case for durable goods producers which are likely anticipating a deterioration in demand for expensive goods as credit becomes more expensive. This reaction will put downward pressure on Q3 growth.