Euro area industrial production showed renewed momentum in February 2025, rising by 1.1 percent compared to January, outpacing the previous month's 0.6 percent growth. This rebound suggests short-term resilience despite mixed sectoral performances. Non-durable consumer goods led the monthly expansion with a sharp 2.8 percent rise, indicating robust consumer demand for everyday items. Capital goods also posted a solid 0.8 percent increase, reflecting moderate investment activity, while declines in energy (minus 0.2 percent) and durable consumer goods (minus 0.3 percent) hint at ongoing caution and subdued long-term consumption.

On a year-over-year basis, Euro area industrial output grew only slightly by 1.2 percent, driven almost entirely by a remarkable 9.7 percent surge in non-durable consumer goods. All other major categories contracted: intermediate goods (minus 2.7 percent), capital goods (minus 1.8 percent), and durable consumer goods (minus 2.3 percent), signalling persistent structural weaknesses.

Regionally, industrial production fell across the top four-euro economies, with the largest falls experienced in Germany (minus 3.7 percent after minus 2.3 percent), Italy (minus 2.7 percent after minus 0.8 percent), and Spain (minus 1.7 percent after minus 1.4 percent). France (minus 0.3 percent after minus 1.0 percent) experienced the mildest annual fall.

While February's monthly gains suggest modest recovery and consumer resilience, the annual trends reflect deeper sectoral imbalances and uneven demand, raising questions about the sustainability of industrial momentum across the euro area. The latest update takes the Euro area RPI to minus 1 and the RPI-P to 11, meaning that economic activities are within the area's consensus.

After a strong 0.8 percent increase in January from December, output is seen down 0.4 percent in February on the month and down 0.9 percent on year.

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.