Eurozone industrial production and foreign trade suffered significantly in April due to the impact of US tariff announcements. Industrial production fell by 2.4% on a monthly basis, exceeding the already weak 1.7% decline expected by economists. Contractions were experienced in all sub-sectors of industry. On the trade side, the surplus decreased significantly, falling from 37.3 billion euros in March to 9.9 billion euros.
While this decline was not entirely unexpected, its magnitude has raised concerns about economic growth, which is projected to remain below 1% this year.
One of the reasons behind this sharp decline is seen as the large-scale pre-emptive purchases by US companies in preparation for tariffs. Exports from the Eurozone to countries outside the EU fell by 8.2%, while overall EU exports dropped by 9.7%. Exports to the US, the Eurozone’s largest trading partner, fell from €71.1 billion in March to just €47.6 billion in April. The sharp decline was particularly evident in chemical products, especially pharmaceutical exports from Ireland. Industrial production in Ireland fell by 15%, significantly contributing to the overall decline in the region. Despite this sharp drop in April, some surveys indicate moderate optimism in the manufacturing sector. This gives hope that although the recovery will be slow, the sector will not fall back into recession.
