Eurozone industrial production declined for the first time in three months in October with almost all sectors contracting as economic uncertainty and higher producer prices took a toll on demand.
After rising for two straight months, industrial output dropped 2.0 percent from September, Eurostat, the statistical office of the European Union reported on Wednesday.
The pace of decline exceeded the expected 1.5 percent drop and also reversed the revised 0.8 percent rise in September.
All sectors except non-durable consumer goods contracted in October. Once again energy output posted the biggest monthly fall of 3.9 percent, followed by a 1.9 percent decrease in durable consumer goods production.
Output of intermediate goods was down 1.3 percent and that of capital goods by 0.6 percent. By contrast, production of non-durable consumer goods gained 0.3 percent.
On a yearly basis, the increase in industrial output weakened to 3.4 percent, as expected, from 5.1 percent in September.
Data showed that industrial production in the EU27 fell 1.9 percent from September, when output was up 0.7 percent. The annual growth in output slowed to 3.7 percent from 5.8 percent.
As the positive effects of easing supply-side issues wane, the outlook remains bleak for the winter months, ING economist Bert Colijn noted. The slowing trend in new orders is set to continue as goods consumption is experiencing a broad correction at the moment.
The Purchasing Managers’ survey suggested that the downturn in the euro area manufacturing sector continued in November but rates of decline in production and orders were less aggressive than in October.
Official data showed that the currency bloc grew only 0.3 percent in the third quarter. The currency bloc is widely expected to enter a recession early next year.
Last month, the Paris-based Organisation for Economic Co-operation and Development projected Eurozone real GDP to climb 3.3 percent this year and only 0.5 percent in 2023 owing to Russia’s invasion of Ukraine, monetary policy tightening and the global slowdown.
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