Be the first to comment!More confidence is needed to reignite production in the EU
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The European Commission has said that the economic outlook for EU industry has deteriorated. According to the January 2012 report published today by the European Commission, in the last three months to November 2011, manufacturing production was some 1% higher than a year ago, but also 1% below the level registered in the preceding three months.
Manufacturing output is still 13% higher than its trough in early 2009 and some 9% below its former peak in early 2008. Output has surpassed its earlier peak in pharmaceuticals, other transport equipment, beverages and food. However, most of the sectors are again declining with the biggest contractions in production occurring in textiles, furniture, leather, printing and computer industries. Recent data and forecasts for services, including tourism, remain positive, but their performance will depend on the general economic situation.
After a very fast initial recovery from the economic crisis, manufacturing output has stabilised and even fallen back over recent months. Business confidence has declined, but still remains broadly at its long-term average. Continued high energy prices, fiscal consolidation and persistent difficulties in access to finance continue to adversely affect the dynamics of the recovery.
Uncertainties about the prospects for the European economy in the light of the euro area debt crisis have negatively affected investment, whilst firms have trimmed output to avoid inventory accumulation. Output in the construction sector remains close to its cyclical trough: a limited recovery in civil engineering works (roads and bridges etc.) has been offset by continued weakness in house building.
European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said, “These figures are disappointing, indeed, but what worries me more is that they could look better. Our data confirm that Europe’s industrial competiveness has improved, but it is lack of trust which withholds industry to invest. In the past days we witnessed encouraging signs, such as in the US industry. If trust comes back to European industry and in particular to the millions of SMEs in this sector, we will have the capacity to get smoothly out of the crisis. Let’s seize this opportunity!”
