Data published by Eurostat shows that there was a sharp fall in industrial production in Europe in April but this only reversed a similarly sized leap in March; while there are some other effects in play, by far the largest movements over these two months were for Ireland where the data is distorted by accounting issues for multi-national headquarters operations based there for tax reasons.
For the record, total industrial production (IP) showed a month-on-month fall of -1.8% for the EU and -2.4% for the Euro-zone; the equivalent trends for March were growth of +1.9% and +2.4% respectively. The comparison with a year earlier (April 2024) are rather less dramatic and show an increase in IP of +0.6% in the EU and +0.8% for the Euro-zone – this is probably a more realistic representation of the underlying trend, although we still see a large swing for Ireland.
Although manufacturing makes up the bulk of IP, the latter also includes the extraction, energy production and utilities industries. Unfortunately, they don’t provide a breakdown of IP that includes manufacturing that we can compare directly with the UK data noted above.
Another way of smoothing the data is to look at rolling 3-month trends; in this case the latest period is February to April 2025 which we can compare with November 2024 to January 2025. This shows total IP rising by +0.9% in the EU and +2.3% in the Euro-zone, although this significant growth is driven by the March figures in the latest period; if we take that out and take the average of February and April, the pace of growth is lower at +0.2% and +1.5% respectively.
This is the first set of data following the “Liberation Day” tariff announcements (and the subsequent pausing) and while it is still a little early to draw too many conclusions, there is some indication of an element of drawing forward of activity in the first three months of 2025 to beat these high tariff rates.
The only level of breakdown in the Eurostat bulletin that matches the UK data is the analysis for capital (or investment) goods. Compared to March, output by this sub-sector was -0.7% lower than in March for the EU, with the Euro-zone showing a decline of -1.1%. The comparison over 12 months with April 2024 saw capital goods output grow by +0.2% in the EU but fall by -0.6% for the Euro-zone – this divergence in direction is unusual and it is not clear what is driving this trend.
Staying with the 12-month comparison, 15 of the EU Member States saw an increase in total IP, with the other 12 registering a decline. The strongest growth was in Ireland (+18.4%), Finland (+10.2%) and Croatia (+6.5%) while the largest percentage reductions were in Denmark (-11.6%), Bulgaria (-10.5%), and Slovenia (-4.6%). However, it is worth noting that, compared to a year ago, output fell in Germany (-2.4%) and France (-2.1%), with only modest increases in Italy (+0.3%) and Spain (+0.5%). You can get the full details from the Eurostat News Release which can be downloaded from their website at https://ec.europa.eu/eurostat/news/euro-indicators (13 June) or requested from MTA.