By Scott Kanowsky
Investing.com -- Eurozone monthly industrial production dropped by the most since the early months of the COVID-19 pandemic in July, according to new data from the European Commission's statistics agency on Wednesday, as soaring inflation and fears of a looming recession led to firms pulling back on output.
Production at the currency bloc's industrial companies fell by 2.3% during the month, reversing a gain of 1.1% in June and below consensus forecasts of a decline of 1.0%. It is the biggest decrease since April 2020.
On an annual basis, industrial production unexpectedly dipped by 2.4%. Economists had predicted the figure would rise marginally by 0.4%.
Factories particularly churned out fewer capital goods, or assets like vehicles or buildings, with production of these assets slumping by 4.2%. Analysts at ING noted that this downturn stemmed mainly from a nearly 19% slide in industrial production in Ireland.
The output of durable consumer goods, such as bicycles and televisions, and intermediate goods like sugar and glass also declined. However, these dips were partly offset by increases in energy and non-durable consumer goods, which include items like food or clothing.
On a country-by-country basis, Germany, France, and Spain - three of the Eurozone's four largest economies - posted significant declines in industrial production, while Italy and the Netherlands saw modest gains.
"For the months ahead, the outlook remains relatively bleak. The energy crisis has started to result in production cuts across the eurozone for the most gas-intensive producers and other supply problems have faded but not disappeared," the analysts at ING said.