Industrial Production MoM

Industrial Production MoM (monthly change) is Eurostat's index of industrial production (IPI) for the European Union and a Principal European Economic Indicator (EU policy gauge). It covers industry excluding construction: mining and quarrying, manufacturing, and energy supply. It tracks value added (output minus intermediate inputs), so vertical integration does not distort it. Eurostat builds the EU aggregate (combined total) from national data as an early business cycle (upturn signal) for GDP (total output) direction.

The reference period is the calendar month of production, with national data compiled into EU and euro area aggregates (combined totals) each cycle. Eurostat publishes results monthly around the 12th to the 15th of the second month after the reference month, about 42 to 45 days later. Dates follow the pre-announced Eurostat calendar using Europe/Luxembourg time. Each release includes MoM tables by group and country with annual rates and index levels, and revises prior months on late data.

Total industry splits into 5 Main Industrial Groupings (broad use-based sectors) that drive the headline.

• Intermediate goods: output used as inputs by other industries, such as metals, chemicals and components.
• Energy: electricity, gas and related energy output, sensitive to weather and prices.
• Capital goods: machinery, equipment and vehicles used for production and investment.
• Durable consumer goods: long-lived household goods such as appliances, furniture and electronics.
• Non-durable consumer goods: short-lived household goods such as food, clothing and pharmaceuticals.

In the March 13, 2024 release for January 2024 output, the EU seasonally adjusted index fell 2.1% MoM. It stood at 99.2, down from 101.3, with annual output down 5.7%. Capital goods plunged 12.8% while intermediate goods rose 2.9% and energy rose 0.6%, with durable goods down 0.1% and non-durable goods down 0.5%. Ireland fell 29.0%, Malta 9.4% and Estonia 6.6%, while Poland rose 13.3%, Slovenia 10.6% and Lithuania 7.2%. The same release cut December 2023 MoM growth from 2.6% to 1.6% and annual growth from 1.2% to 0.6%, showing why revisions matter. December had shown the mirror image, with capital goods up 10.2%.

1. National proxy: True monthly value added is unobservable. Each country extends base year value added with a close proxy such as deflated turnover, physical volumes, work input or energy use.
2. Laspeyres-type index: Each national index is a Laspeyres-type index comparing current month volumes at base year prices with base year value added. In symbols: i(c,t) equals 100 times current volumes at base prices divided by base value added.
3. Activity aggregation: Detailed NACE indices combine upward by summing each index times its weight in the higher activity.
4. Geographical aggregation: The EU index is the weighted sum of member indices with fixed 2021 shares. No EU aggregate appears without 60% weight coverage, and a missing higher aggregate is estimated at 80% coverage.
5. Adjustment: MoM rates use calendar- and seasonally-adjusted data built by the indirect method as a weighted sum of nationally adjusted series. YoY rates use calendar-adjusted data. The reference level is the average of the 12 months of 2021 = 100.
6. Rates: MoM equals 100 times the adjusted index divided by the prior month minus 1, and YoY uses the same ratio over 12 months.
7. Illustrative example: With invented numbers, country A at 102.0 with weight 0.7 plus B at 96.0 with weight 0.3 gives an EU index of 100.2. Against a prior month of 101.0, MoM equals 100.2 divided by 101.0 minus 1 times 100, or negative 0.8%.