Eurozone industry rebounded in August, offering a ray of optimism for the beleaguered factory sector as European Central Bank policymakers prime to cut interest rates again.

Industrial production increased 1.8% on month across the 20 members that use the euro, EU figures showed Tuesday. That is a stronger increase than the 1.6% expected by economists surveyed by The Wall Street Journal, and marks the fourth time since the beginning of 2024 that output has risen rather than fallen, in what has proved an uneven year for the sector.

The currency union’s two largest economies, Germany and France, helped drive the recovery, both booking solid increases in factory output. Production increased across most categories, including consumers goods, capital goods and energy, though intermediate goods fell back a little in output.

Eurozone factories are nevertheless still putting out less than they were in 2021, before Russia’s fullscale invasion of Ukraine dealt a blow from which they have struggled to recover. Further geopolitical strife and weak demand from export markets have added to the sector's woes.

The ECB this summer began to lower interest rates in a bid to ease the weight on investment and demand, and is expected to do so again when its governing council meets in Frankfurt on Thursday.