in July 2024 compared to July 2023. The preliminary report from Eurostat, the statistical office of the European Union, indicates a decline in industrial production of 2.2% in the euro area and 1.7% in the EU.
Analysis by Member States The biggest declines:
Malta: recorded the largest monthly decline of -5.5%. This large decline may be the result of specific local challenges in the industrial sector.
Estonia: decreased by -4.8%. The decline in Estonia reflects weaker industrial performance compared to other countries.
Romania: recorded a decrease of -3.4%. This decrease indicates negative effects on industrial production in Romania.
The biggest increases:
Ireland: achieved a significant increase of +9.2%. This large increase is an indication of a strong recovery in the Irish industrial sector.
Croatia: increased by +8.0%. This increase reflects a significant improvement in industrial performance.
Belgium: saw an increase of +7.3%. This increase is an indicator of a strong performance in the Belgian industrial sector.
In July 2024, compared to July 2023, the euro area saw notable changes in industrial production:
Intermediate goods: down 2.9%.
Energy: up 1.7%.
Capital goods: down 5.3%.
Durable consumer goods: down 4.4%.
Non-durable consumer goods: up 2.2%.
In the EU, the changes were as follows:
Intermediate goods: down 2.7%.
Energy: up 2.3%.
Capital goods: down 5.4%.
Durable consumer goods: down 3.5%.
Non-durable consumer goods: up 3.9%.
The largest decreases were recorded in Hungary (-6.4%), Estonia (-5.8%) and Germany (-5.5%). While the highest increases were recorded in Denmark (+19.8%), Greece (+10.8%) and Finland (+6.4%). The current analysis shows a significant decline in industrial production in the euro area and the EU for July 2024. This decline reflects ongoing economic challenges that require an effective response from companies and governments alike. By adopting improvement and development strategies, the industrial sector can overcome these challenges.
Industrial production decline in July 2024
According to preliminary estimates from Eurostat, seasonally adjusted industrial production in July 2024 fell by 0.3% in the euro area and by 0.1% in the EU. These figures indicate the continuing challenges facing the industrial sector in the region. In June 2024, industrial production remained unchanged in the euro area, while it increased slightly by 0.1% in the EU. In comparison, the data for July 2024 reflects a negative change in industrial performance.
Comparative analysis of industrial production
Decrease in industrial production on a monthly basis: In July 2024, industrial production figures fell by 0.3% in the euro area and 0.1% in the European Union compared to June 2024. This decline comes after a relative stability in June, when industrial production in the euro area did not witness any change, while it grew slightly in the European Union.
This decline reflects ongoing challenges facing the industrial sector in both regions, which calls for a deeper analysis to understand the influencing factors.
Decrease in industrial production on a yearly basis: When comparing July 2024 with July 2023, the report shows a decline of 2.2% in industrial production in the euro area, and 1.7% in the European Union. These declines indicate negative effects in the long term, which may be the result of economic fluctuations or structural challenges.
Possible reasons for the decline in industrial production
Global economic conditions: The slowdown in global economic growth could be one of the main reasons behind the decline in industrial production in the euro area and the European Union. The decline in global demand for industrial exports could have a significant impact on the performance of the industrial sector in the region.
Changes in production policies: Changes in economic and production policies may play an important role in these declines.
Impact of Decline in Industrial Production
- 1. Impact on the Macroeconomy: A decline in industrial production could have broad implications for the macroeconomy. A decline in production could lead to a decline in economic growth, increased unemployment rates, and pressure on the SME sector.
- Impact on Employment: Continued declines in industrial production could lead to reduced employment opportunities in the sector. Firms may be forced to reduce staff or postpone new hires as a result of reduced demand and production.
- Impact on Investment: Firms and investors may become more cautious in their investment decisions as a result of a decline in industrial production. Instability in the sector could lead to a reduction in new investments and postponement of expansion projects.
Future Outlook for Industrial Production
- Short-Term Outlook: The challenges facing the industrial sector are expected to continue in the short term. Firms may find it difficult to adapt to global and local economic fluctuations, which could lead to a continued decline in production.
- Long-Term Outlook: In the long term, there could be an improvement in global and local economic conditions, which could help industrial production recover. Investments in technology, improvements in production policies, and strengthening domestic demand could help restore growth in the sector.
Recommendations for improving industrial performance
- Promote technological innovation: Technological innovation can play an important role in improving productivity and reducing costs. Companies should invest in research and development and adopt new technologies to improve industrial performance.
- Improve production strategies: Updating production strategies and adopting more efficient methods can help address current challenges. Improving supply chain management and reducing reliance on volatile raw materials can have a positive impact.
- Strengthen public-private cooperation: Public-private cooperation can enhance support for effective industrial policies. Strategic partnerships can contribute to achieving sustainable growth strategies and improving the business environment.
