The European industrial sector is witnessing a substantial increase in production levels.
Eurozone production growth in August was up by 1.8%, as per Eurostat figures. This surpassed the anticipated 1.7% rise predicted by Reuters' analysts. In contrast, July saw a minor decrease of 0.5%. On an annual basis, industrial production only saw a marginal increase of 0.1%.
The production of capital goods, including machinery and vehicles, experienced a significant boost of 3.7% in August 2024 compared to the previous year. Manufacturing of durable consumer goods also saw a rise of 1.7%. However, the production of intermediate goods dipped by 0.3% from the previous month. Energy providers managed to increase output by 0.4%.
Interestingly, the demand for corporate loans in the Eurozone has picked up for the first time in two years. This uptick occurred despite the European Central Bank (ECB) raising interest rates in June and September. Experts speculate that the deposit rate, which impacts financial markets, might decrease by 0.25 percentage points to 3.25% on Thursday. Such a reduction could potentially improve financing conditions further within the economy.
The decrease in the production of intermediate goods last month was less severe than some analysts had predicted. Due to the potential interest rate decrease, the cost of corporate loans could become less burdensome for some businesses.
