Improved competitiveness, increased sales

Malta with the largest increase in industrial production in the euro area during 2023.

Statistics published on the Eurostat website indicate that during 2023 Malta had the largest increase in industrial production among all euro area countries. In fact, industrial output rose by 5.7% in Malta against a decrease of 2.4% on average in the monetary union.

Apart from Malta, it was only in Greece and France that there was an increase in industrial production over the past year. In stark contrast, in Estonia there was a massive decrease of 10.8%, while in the Netherlands and Ireland there was a decrease of more than 7%. Germany, which is traditionally Europe’s industrial powerhouse, saw a loss of 1.7%, while production in our neighbouring country, Italy, was down 2.5%.

The main reason behind the decline in industrial production in the euro area was due to the lack of competitiveness of European factories. This was due to a severe blow to energy costs suffered by these factories during 2023. In fact, Eurostat data indicate that last year businesses in the euro area saw an 11% increase in the price of energy. In some countries the blow to businesses was much greater, such as in the Netherlands where there was a 38% increase in the burden of factories’ electricity bills. At the same time, the price of gas for industrial users across the euro area increased by an average of 20%. In Germany there was even a stronger upward shock in gas price for factories of 35%.

Burdened by the hike in energy costs, European factories could not keep prices low. In view of the poor state of demand, because of austerity politics being practised by many Governments, the increase in prices led to factories facing lower sales.

In contrast, because there was no increase in the price of energy in Malta, producers improved their competitiveness and increased sales because the prices they offered were very attractive.

Industrial production (2023)

Malta5.7%
Greece2.3%
France0.7%
Croatia-0.1%
Slovakia-0.5%
Spain-0.7%
Austria-1.3%
Finland-1.5%
Germany-1.7%
Euro area-2.4%
Italy-2.5%
Portugal-2.7%
Latvia-4.5%
Belgium-5.2%
Lithuania-5.2%
Slovenja-5.3%
Luxembourg-5.7%
Ireland-7.2%
Netherlands-7.5%
Estonia-10.8%

Photo: Shutterstock

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