August as supply chain bottlenecks restricted production of many products, such as German cars, raising concerns that the bloc’s economic rebound may run out of steam.
Several companies in Germany’s large carmaking industry have been forced to idle production and put thousands of workers back on furlough due to shortages of materials, particularly semiconductors.
This led to a 1.6 percent drop in manufacturing production in August from the previous month across the 19 countries that share the euro, Eurostat announced on Wednesday. The fall was in line with economists’ expectations.
One of the steepest declines was in Germany, where manufacturing output dropped 4.1 percent. However, in France, industrial output rose 1 percent, while Spanish industrial output was up 0.1 percent.
Maddalena Martini, an economist at Oxford Economics, said: “The automotive sector is bearing the brunt of the global semiconductor shortage, with car manufacturers often sitting on a large stock of semi-finished vehicles waiting for components.”
But she added that the “latest data suggest that the supply of microchips is finally turning a corner and we expect it to gradually ease over the coming quarters”.
Eurostat said capital goods production was down 3-9 percent in August, durable consumer goods output fell 3-4 percent, intermediate goods declined 1.5 percent and non-durable consumer goods fell 0.8 percent. The only growth was in a slight rise in energy output.
The overall eurozone economy is still expected to grow at about 2.5 percent in the third quarter, compared with the previous quarter, boosted by a continued rebound in household spending. But some economists worry that this could be hit by the recent surge in European gas and electricity prices.
Fabio Balboni, senior economist at HSBC, estimated that the rise in regulated energy prices and oil prices would knock 0.6 per cent off eurozone household income, and reduce gross domestic product growth by 0.2 percentage points.
“It still does not seem enough to derail the recovery, accounting for the likely pick-up in wages and accumulated excess savings,” said Balboni. “Still, it could