Eurozone industrial production increased by just 0.4% in February compared to January, leaving output below most of 2025 levels, according to ING’s Bert Colijn [1]. The report highlights that the resilience shown by Eurozone industry throughout 2025 is now waning, with the start of 2026 proving discouraging as production levels have dropped following the easing of front-loading by American businesses [1].
Colijn notes that higher energy prices and the onset of war in the Middle East, which began in March, are expected to exert further downward pressure on energy-intensive industries and investment decisions [1]. The surge in energy prices has already put additional strain on these sectors as of March, and a broad-based rebound in production is not anticipated soon [1].
While manufacturers remain optimistic about infrastructure and defense investment promises, the Middle East war has dashed hopes for a widespread recovery. Energy-intensive industries are particularly vulnerable, with their competitiveness facing renewed challenges due to rising costs and increased uncertainty [1]. However, some high-tech sectors may continue to perform well despite these headwinds [1].
Overall, downside risks for Eurozone industrial production have increased, and uncertainty stemming from geopolitical tensions and energy market volatility could further impact investment and output in the coming months [1].
CONCLUSION
Eurozone industrial production is under mounting pressure from rising energy prices and the Middle East war, with energy-intensive sectors facing significant challenges. Optimism persists in certain high-tech areas, but overall, the outlook remains subdued and a broad-based rebound is unlikely in the near term. Market participants should expect continued volatility and downside risks for Eurozone industry.