Industrial production in the euro area: Navigating shocks, sectoral challenges, and global trade shifts
Industrial production
Fecha: noviembre 2024
Miguel Ángel González Simón
SEFO, Spanish and International Economic & Financial Outlook, V. 13 N.º6 (November 2024)
The euro area’s industrial sector, historically a pillar of economic strength, faces significant challenges in the wake of the COVID-19 pandemic and the Russia-Ukraine conflict. These exogenous shocks have exposed structural weaknesses, causing a divergence in performance between countries and sectors. While Germany, France, and Italy have experienced notable declines in industrial output, Spain and smaller eurozone countries have demonstrated resilience, with positive industrial production figures derived in part from varying degrees of reliance on Russian energy. At the sectoral level, energy-intensive goods and intermediate products have faced the steepest declines, underscoring structural vulnerabilities, while non-durable consumer goods showed resilience due to lower sensitivity to business cycles. External trade dynamics are further complicating recovery, with additional trade headwinds from China potentially exacerbating existing tensions. Thus, as the region navigates these obstacles, it will be necessary to complement country-specific policies with EU-wide strategies to support key sectors, such as the automotive industry.