Industrial production in the euro area showed a strong rebound in March 2025, rising by 2.6 percent compared to February. This monthly momentum builds on February's modest 1.1 percent growth, suggesting a firming recovery in the region's industrial sector. The surge was led by capital goods (up 3.2 percent) and durable consumer goods (up 3.1 percent), pointing to increased investment and consumer confidence. Non-durable goods also saw a healthy rise of 2.3 percent, although energy production dipped slightly by 0.5 percent.

On an annual basis, euro area industrial output climbed 3.6 percent compared to March 2024, with standout performance in non-durable consumer goods, which soared by 15.7 percent, reflecting strong demand for everyday essentials. Energy production also grew by 2.2 percent, potentially driven by seasonal factors or stabilised energy markets. However, intermediate goods declined slightly by 0.2 percent, hinting at ongoing challenges in supply chains or slower upstream demand.

Regionally, industrial production rose across three of the top four-euro economies, with the largest rise experienced in Spain (1.3 percent after minus 1.8 percent), Germany (0.3 percent after minus 3.5 percent), and France (0.3 percent after minus 0.1 percent). However, Italy (minus 1.8 percent after minus 2.6 percent) continued to witness a negative industrial production growth.

Overall, the data signals growing industrial resilience across the eurozone, underpinned by rising demand and investment. Despite energy fluctuations and mild contraction in intermediate goods, March 2025 marks a turning point towards broader industrial recovery across member states. The latest update takes the RPI to 25 and the RPI-P to 15, meaning that economic activities continue to remain well ahead of the expectations in the eurozone.

Output is seen extending its bounce with a strong 1.6 percent increase in March on the month and up 2.1 percent on year. In February, industrial production was up 1.1 percent on the month and 1.2 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.