On Wednesday, European Commission’s statistics agency Eurostat revealed that Eurozone monthly industrial production in July fell by the most since the early months of the COVID-19 pandemic. According to the data, the companies pulled back on outputs due to soaring inflation and fears of a looming recession.

Data reveals that production dropped by 2.3 per cent during the month, reversing a gain of 1.1 per cent in June and below consensus forecasts of a decline of 1.0 per cent. It is the biggest decline since April 2020. Further, on an annual basis, industrial production plunged by 2.4 per cent. It is estimated that the figure would rise marginally by 0.4 per cent.

Companies particularly produced fewer capital goods, and assets like vehicles or buildings, with the manufacturing of these assets declining by 4.2 per cent. This downturn emanated mainly from a nearly 19 per cent drop in industrial production in Ireland.

The output of intermediate and durable consumer goods also dipped. However, these plunges were partly compensated by increases in energy and non-durable consumer goods.

It is noteworthy that three of the Eurozone’s four largest economies, namely Germany, France, and Spain, posted significant drops in industrial production. Italy and the Netherlands, on the other hand, witnessed modest gains.