Economic recovery in the EU continues at a slower pace
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In the last three months to July 2011, manufacturing production was 4.5% higher than a year ago, but was almost unchanged compared to the first quarter. Manufacturing production in recent months has been affected by supply disruptions stemming from the Japanese tsunami. Manufacturing output is now some 14% higher than its trough in early 2009 and still 8% below its peak in early 2008.
Recent falls in business confidence indicate a slower growth rate in the second half of the year, but industrial confidence is still above its long-term average. High energy and other input prices, supply disruptions from the Japanese earthquake, fiscal retrenchment in some countries, and some continued limitations on access to finance are adversely affecting the dynamics of the recovery. Output in the construction sector has stabilised at a relatively low level, with a recovery visible in civil engineering.
European Commission Vice President Antonio Tajani, responsible for Industry and Entrepreneurship said, “Our industry is in a better shape than before the crisis. This is underlined by the good performance of the German and French industry in July. However the slowdown of the recovery should push us to continue promoting growth and competitiveness, also through structural reforms aimed at freeing industry and SME’s potential.”
The full September report on “The Economic Recovery in Industry”
There has been a slowdown in the recovery of manufacturing output in the second quarter 2011.
The highest increases in output have been in computer and electronics, and mechanical and engineering sectors, whilst a contraction has been registered predominantly in intermediate goods, in particular tobacco, textiles, wearing apparel, and other non-metallic mineral products.
Labour markets remain rather stable. Recent data and forecasts for services, including tourism, remain positive, but will depend on the general economic situation.
Extra-EU exports have recovered their former peak. Growth in intra-EU trade, internal demand and private consumption continue to be subdued and lag behind growth in emerging countries.
Data on the first quarter of 2011 confirm that employment in manufacturing has stabilised. Since the cyclical peak in 2008, manufacturing jobs have nevertheless contracted by some 11%. The unemployment rate has been stable for three months and some improvements are now also visible in some countries.
Comparison of Member States
Looking at the situation in the Member States, substantial differences are evident:
Recovery is now visible in all countries, except Cyprus and Greece.
Although EU manufacturing output is still below its pre-crisis level, in some countries it is now well above pre-crisis levels, notably Poland, Slovakia, Belgium and Ireland and Estonia.