Rising energy costs make the recovery of manufacturing in the Eurozone difficult

People’s Financial News, March 13 — Bert Colijn, Chief Economist at ING Group, stated on the 13th that industrial output in the Eurozone in January has fallen to its lowest level since the end of 2024. As Middle East conflicts push energy prices higher and exacerbate supply chain disruptions, the Eurozone’s industrial production, especially in energy-intensive sectors, faces new risks. Data released on the same day showed that after a 0.6% decline in December last year, Eurozone industrial output in January decreased by 1.5% month-on-month, the lowest since December 2024. During that month, industrial output in major economies such as Germany, Italy, and Spain all declined compared to the previous month. Colijn said that markets had initially expected increased public investment in the Eurozone to boost manufacturing, particularly in defense and infrastructure spending, which would drive manufacturing growth. However, if energy prices continue to rise, the outlook for recovery in energy-intensive industries will be impacted. Colijn pointed out that the surge in energy prices from 2021 to 2022 has put sustained pressure on Europe’s energy-intensive industries. Recently, confidence in the Eurozone manufacturing sector has slightly recovered, but geopolitical tensions again pose significant downside risks to the region’s industrial outlook. (CCTV News)