In November, industrial production showed a statistical improvement compared to the previous month, with a year-on-year growth rate of 3.6%. Over the cumulative period of January to November, the year-on-year increase stood at 2.6%. However, over the past ten months, the trend in the physical volume of overall industrial production has remained consistently about 2.5% higher than the previous year’s average. Without an acceleration in the processing sector from January 2024 onwards, it is anticipated that the year-on-year growth rates for the entire industry will be considerably more modest.
Throughout the first eleven months of 2023, the significant year-on-year growth of total industrial production, observed at 2.7%, was predominantly driven by the electricity production sector (2.13pp). Following closely was the Manufacturing sector with a contribution of 0.4pp, while the Mining sector showed a more modest contribution (0.14pp). However, when analyzing sectoral production dynamics against the current trend, it appears that all three sectors are experiencing stagnation or near-stagnation.
The Mining sector has maintained a similar production level with minor fluctuations since the first quarter of 2022, resulting in its lowest growth rate in 2023. The Manufacturing sector has also experienced a stagnant trend in production for the past nine months. Despite minor fluctuations, production in the Electricity, Gas, Steam, and Air Conditioning Supply sector is also trending towards stagnation.
Short-term revitalization of the Manufacturing sector amidst pronounced economic slowdown seems improbable. However, a positive turnaround in the latter half of 2024 could occur with a substantial increase in production, such as the launch of the new Fiat Panda model in Kragujevac. Yet, such discussions should be reserved for a more opportune time. For now, the focus should remain on sustaining current production levels.
It’s worth noting that the year-on-year decline in production volume in October within the eurozone reached -6.6%, indicating an increasingly pronounced economic slowdown since March 2023. The challenges are even more complex within the manufacturing sector, where the year-on-year decline exceeds 7%, with an increasing number of European countries experiencing double-digit production declines.
Internal movements within the Manufacturing sector suggest no stable trend, with monthly fluctuations primarily being incidental and unpredictable. Cumulatively observed for eleven months of 2023, the most significant issues were observed in areas such as the Manufacture of Metal Products (except Machinery) and the Manufacture of Coke and Refined Petroleum Products.
The overall movement of the industry, categorized by purpose groups, shows growth in all categories except Durable Consumer Goods. Capital Goods and Intermediate Goods (except energy) witnessed the most significant increases.
The overarching challenges faced by the manufacturing industry continue to stem from external constraints, including the global economic slowdown, geopolitical tensions, and heightened financial conditions due to inflation. However, there’s a slight silver lining as price relationships have improved compared to previous periods.
