In November 2024, industrial production in the euro area showed modest monthly growth of 0.2 percent, consistent with October's revised figure, while the annual output contracted by 1.9 percent. Monthly growth was driven by strong gains in durable consumer goods (1.5 percent) and energy (1.1 percent), indicating resilience in consumer-driven and energy sectors. Intermediate goods and capital goods also posted 0.5 percent increases, signalling a moderate recovery in industrial inputs and investment-linked outputs. Non-durable consumer goods lagged, growing only 0.1 percent.

On an annual basis, the decline was broad-based, with intermediate goods (minus 2.5 percent) and capital goods (minus 2.8 percent) suffering the largest contractions, reflecting challenges in industrial supply chains and investment activities. Energy (minus 1.3 percent) and durable consumer goods (minus 1.0 percent) also declined, while non-durable consumer goods remained stable, possibly buoyed by sustained consumer demand for essential goods.

Regionally, industrial production fell on an annual basis in Spain (minus 0.8 percent after 3.1 percent), France (minus 1.1 percent after minus 1.0 percent), Italy (minus 1.5 percent after minus 3.5 percent), and Germany (minus 3.3 percent after minus 4.5 percent). Revisions to October data highlight slight improvements, with the euro area's monthly growth adjusted to 0.2 percent and annual contraction to minus 1.1 percent, suggesting the industrial sector may be stabilising, albeit slowly.

These trends emphasise the industrial sector's short-term recovery, tempered by persistent annual declines. The latest update takes the RPI to minus 23 and the RPI-P to minus 43. This means that economic activities, in general, are well behind market expectations.

Industrial output is expected up 0.5 percent on the month in November after a flat showing in October. On the year, the consensus looks for a decline of 1.6 percent.

Industrial production measures the physical output of factories, mines and utilities. The measure provided by Eurostat excludes the volatile construction subsector for which data are released a few days later.

Industrial production measures changes in the volume of output for the EMU's member states. The industrial production index provides a measure of the volume trend in value added at factor cost over a given reference period, excluding VAT and other similar deductible taxes. The preferred number is industrial production excluding construction. As with other EMU statistics, the data are provided by the national statistics offices to Eurostat (the European Union statistical agency) where it is combined to produce an overall output measure.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.