Services and consumption sector in Europe have remained “relatively resistant” this year. However, investment is beginning to lose strength due to bad data from the industry.
The IMF calculations point to a moderation in the growth of the eurozone from + 2.3% in 2018 to + 1.3% in 2019, one tenth less than its October estimates. In fact, the + 1.8% rebound that the IMF expects by 2020 is justified by the expectations that international trade will rebound and the industry will begin to grow. The fall in industrial production by machinery and transport is worrisome since it is a “particularly relevant” sector for Europe.
As the Fund points out in its latest health check of Europe’s economy, “following global trends, trade and manufacturing in Europe have weakened considerably.”
This projection, broadly unchanged from the April 2019 World Economic Outlook, masks significant differences between advanced and emerging Europe.
The EU Commission published on 5 November recommendations by experts, the Strategic Forum on Important Projects of Common European Interest, to boost Europe’s competitiveness in six industrial sectors. By investing jointly in Europe’s industrial assets, Brussels aims to spur job creation and economic growth.
The industrial sector has created 1.7 million jobs in Europe since 2013 and accounts for more than two-third of EU exports. However, it is facing more and more challenges due to a combination of factors: globalisation, the economic downturn and the digital transition.