By Ed Frankl
Eurozone manufacturing is showing signs of life again after industrial production jumped unexpectedly in December, further signaling that the recent slump in manufacturing in the bloc may be coming to a close.
Total production rose on 2.6% on month in December, according to figures published Wednesday by European Union statistics agency Eurostat, the second-straight rise, after a revised 0.4% increase recorded in November.
December’s result upended expectations of a fall of 0.2%, according to a consensus of economists polled by The Wall Street Journal.
Amid low demand and steep interest rates, industrial production had fallen in four of the five months prior to November. But purchasing managers’ survey data has shown that manufacturing sentiment has improved in each of November, December and January, indicating that there could have been some bottoming out of weakness in the sector.
Compared with December 2022, output grew 1.2%–the first time it has risen on year since February 2023.
The rise in production was driven by a 20.5% increase on month in capital goods, which incorporate assets like machinery, equipment and vehicles that are used to make consumer goods. Meanwhile, energy output climbed 0.3% on month, production of durable consumer goods rose 0.5%, while for nondurable goods it ticked up by 0.2%.
Some of the growth in production was driven by an outsized surge in Ireland of 23.5%. However, given its location as the base for several multinational companies, its impact is perhaps skewed, and Ireland’s statistics body is carrying out a review of the methodology for measuring industrial production.
But in Germany, traditionally the workhorse of European industry, the environment is still weak, with production falling there by 1.2%. In Spain, it dipped by 0.4%, while output grew in both France and Italy by 1.1%.
Write to Ed Frankl at edward.frankl@wsj.com
