Industrial production on a monthly basis, fell by 1.2 percent after a modest 0.5 percent increase in July, reflecting a temporary loss of momentum in the manufacturing sector. The decline was largely driven by weaker activity in capital goods (minus 2.2 percent) and durable consumer goods (minus 1.6 percent), suggesting reduced investment demand and cautious consumer spending. Energy production also dipped (minus 0.6 percent), reflecting continued pressure on the energy market, while non-durable consumer goods posted a slight rise (0.1 percent), possibly supported by household essentials.

However, compared with August 2024, industrial production rose by 1.1 percent, signalling a degree of recovery over the year. This improvement was mainly sustained by strong growth in non-durable consumer goods (8.2 percent), which helped offset declines in all other categories, including durable consumer goods (minus 2.6 percent) and intermediate goods (minus 1.7 percent).

The annual data suggest that while consumer-oriented industries remain resilient, investment-related sectors are still struggling to regain consistent growth. In summary, the figures point to uneven industrial recovery across the euro area, shaped by fluctuating demand, energy adjustments, and broader economic uncertainties affecting production dynamics. These updates take the RPI to 9 and the RPI-P to 22, meaning that economic activities, adjusted for prices, are now within the expectations of the euro area economy.

Output expected to fall back by 1.9 percent on month and by 0.5 percent on year in August after gaining 0.3 percent and 1.8 percent respectively in July.

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.