There is no sugarcoating it. European industry is going through a deep correction, and it does not look like the end is here yet. Since mid-2022, industrial production has been in steady decline. This represents the strongest downturn in production in more than 30 years without the eurozone economy entering a recession.
The eurozone is quite alone in this. Other major economies are not experiencing a similar downturn. Looking at China and the US for example, we see that the US has experienced flatlining production over the past 18 months, while China saw production grow by about 6%. The eurozone saw production decline by a similar amount.
Germany is most often described as the sick man of Europe in terms of manufacturing. But the reality is that while Germany may have experienced a larger contraction in industrial production than most other markets, there are very few shining lights within the eurozone. None of the major eurozone economies now produce more than at the start of 2023. France has performed best but is down 0.4%, while Germany has experienced a downturn of 8.4% based on comparable data from Eurostat. -ING
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