Eurozone industrial output pulls back sharply in September

Industrial output in the eurozone contracted more than expected in September, figures from Eurostat revealed on Wednesday.

Production fell by 1.1% across the single-currency region, pulling back after a 0.6% increase in August. The market consensus was for a smaller drop of 0.7%.

Compared with September 2022, output was 6.9% lower in September, worse than the 5.1% year-on-year decline the previous month and the 6.3% fall expected by analysts.

Month-on-month, Eurostat said that the production of both durable and non-durable consumer goods fell by 2.1%, while energy output declined by 1.3% and intermediate goods decreased 0.3%, while capital goods output rose 0.3%.

"With surveys pointing to weak orders amid destocking and little signs of consumers coming to the rescue, we think that eurozone GDP will stagnate or even contract again over Q4," said Mateusz Urban, senior economist at Oxford Economics.

"Growth is set to pick-up over 2024, although we expect sequential growth rates to remain below potential."

The data came as the Eurozone Commission cut its GDP forecasts for the eurozone for 2023 and 2024, saying that growth had lost momentum on the back of the high cost of living, weak external demand and elevated interest rates.

The Commission now expects GDP growth of 0.6% for this year and 1.2% in 2024. This is 0.2 percentage points below the summer forecast.