Eurozone production slumps as economy starts 2024 with stumble

EURO area industrial production slumped at the start of the year, raising the prospect that the economy as a whole is struggling to grow in the first quarter.

Output in the region fell by 3.2 per cent in January from the previous month, whose increase was also revised down markedly, Eurostat said on Wednesday (Mar 13) in Luxembourg. The decline from December was notably worse than the 1.8 per cent median forecast of economists surveyed by Bloomberg.

The data underscore how the region’s manufacturing base is suffering, most significantly in Germany, its biggest economy. The decline raises the prospect that it’ll weigh on the overall economy in the current quarter.

Forecasters surveyed by Bloomberg already anticipate only modest expansion of 0.1 per cent in the first three months of the year. Last week, European Central Bank President Christine Lagarde unveiled a lower outlook for 2024 and predicted that growth will stay “subdued” for now.

Output of capital goods fell the most on the month, dropping 14.5 per cent. Consumer goods also showed declines. By contrast, both intermediate goods and energy eked out some gains. 

Geographically, by far the biggest drop in the region was experienced by Ireland, which saw a 29 per cent slump from December. Eurostat cautioned that the statistics authorities there are reviewing their methodology of applying seasonal adjustment to the production data. BLOOMBERG