The industrial production of the Eurozone, consisting of 20 countries, experienced a drop of 0.7% in October which accounts for a 6.6% year-on-year decline, according to the statistics office Eurostat. The output of capital goods also noticeably declined by 1.4%. Meanwhile, intermediate and non-durable consumer goods like food and clothing also fell by 0.6%. On the other hand, energy production rose by 1.1% and durable consumer goods by 0.2%. The drastic fall was observed in Irish industrial output which was down by 7.0%, whereas Greece saw a 6.0% increase in comparison to September.
Details on the Decline in Industrial Production
The European Union’s Eurostat announced that industrial production across the 20 nations comprising the euro slumped by 0.7% from September to October. This dip marked a year-on-year decrease of 6.6%.
Causes behind Month-on-Month Fall
The month-on-month downturn was predominantly caused by a 1.4% fall in the output of capital goods. Additionally, a 0.6% decrease was observed in the production of intermediate and non-durable consumer goods, including food and clothing.
Segments with Increased Production
Despite the overall decrease, certain sectors did witness an increase. The energy production sector saw an upturn of 1.1%, while durable consumers goods witnessed a marginal increase by 0.2%.
Country-wise Industrial Outputs
The most substantial reduction of 7.0% was seen in Ireland’s industrial output. Interestingly, Greece’s output was 6.0% higher than its level in September.
Economic Contraction Anticipated
In the third quarter, the eurozone economy suffered a slight 0.1% contraction, and it is projected to decline further by the end of 2023, signaling a recession. Surveys involving purchasing managers have also highlighted declines in business activity in both October and November.
Eurostat release is available at:
Potential Impact on Forex Market
This contraction in the Eurozone industrial production could potentially influence the forex trading landscape. Traders, notably those invested in the Euro currency and related assets, should remain alert to the possibility of further economic contractions.