Eurozone industrial sector weakens as energy and uncertainty exert pressure

(1) Eurozone industrial output has declined for three consecutive months, falling by about 0.5% month-on-month in August. This suggests that the resilience of manufacturing to global uncertainty may have been overestimated. (2) At the start of the year, Europe received a brief boost due to energy costs improving relative to Asia, and output in energy-intensive industries once picked up. However, this effect has now clearly faded. (3) Output in the chemical industry has fallen by about 1.7% compared to January, and the automotive and pharmaceutical sectors have also seen a significant decline since June, dragging down overall production. (4) In comparison, computers and electronic products continue to perform relatively well, and recent machinery output has been supported by Dutch chip equipment manufacturing. The technology cycle has provided some assistance to Eurozone industry, but not as strongly as in the US. (5) Looking ahead, high energy prices are expected to continue suppressing production; natural gas prices are now significantly higher than in spring, posing one of the main risks. (6) Nonetheless, manufacturers remain relatively optimistic about order prospects, with technology and public investment likely to continue. Market expectations for moderate growth have not yet shifted significantly.