EU industry in January: moderate growth, structural weaknesses

The European economy started 2025 with a cautious recovery in the manufacturing sector. According to Eurostat, industrial production in the eurozone increased by 0.8 per cent in January compared to December, and by 0.3 per cent in the EU as a whole. This is a modest recovery from the downturn at the end of 2024.

However, when compared to January 2024, the picture changes: annual growth in the euro area is zero, while the EU recorded a decline of 0.2 per cent. This indicates continued stagnation and the absence of a sustainable recovery trend.

Intermediate goods were the main driver of growth, with the largest increase in output in January. The production of capital goods also increased slightly, while non-food short-term consumption goods and the energy sector, on the contrary, showed a decline.

On a country-by-country basis, the most dynamic recovery was observed in Lithuania, Portugal and Austria. At the same time, industrial production fell sharply in Malta, Denmark and Slovakia, reflecting the continued heterogeneity of the economic rhythm across the EU.

Luxembourg was in a recessionary zone: after a significant growth of 6.1% in December 2024, production fell by 3.3% in January. However, in annual terms, the country is showing growth of 1.8%, which may indicate positive dynamics in the long term, despite short-term fluctuations.

Looking at the pattern of change by product type, short-term consumer goods remain on the upswing, while capital goods and energy production continue to decline. This indicates persistent structural problems in the sectors responsible for investment demand and infrastructure development.