Industrial production in Spain contracted by 1% year-on-year in January 2025, marking the steepest decline in ten months and reversing from a downwardly revised 2% expansion in December 2024.
Spain industrial production shrinks in January
The downturn was largely driven by a sharp drop in equipment goods output (-4.7% vs. -1.8% in the prior month), signaling weaker demand for industrial machinery and transport equipment. Additionally, production growth slowed for nondurable consumer goods (1.4% vs. 3.4%), intermediate goods (1.5% vs. 3%), and energy (0.1% vs. 0.7%), reflecting subdued industrial activity and lower energy demand.
On a more positive note, the output of durable consumer goods rebounded, rising by 3.4% after a steep 3.5% contraction in December, suggesting some resilience in consumer-oriented manufacturing industries. However, the overall industrial sector faced headwinds amid softer domestic and external demand, higher borrowing costs, and lingering global trade uncertainties.
Month-over-month figures
On a month-over-month basis, industrial production also declined by 1%, highlighting persistent challenges for Spanish manufacturers at the start of the year. The weakness in industrial activity raises concerns about the broader economic outlook, particularly as Spain has been one of the stronger-performing economies within the Eurozone. Moving forward, industry leaders and policymakers will likely monitor developments in energy prices, supply chain conditions, and interest rate policies for signs of recovery in the sector.
