Monthly Note on the Economic Recovery in Industry - October 2011 Published on: 31/10/2011, Last update: 02/12/2011
Economic recovery in industry continued through the summer months despite increasing uncertainties about the prospects of the European economy. However, recent falls in business confidence indicate a lower growth rate in the coming months. High energy prices, fiscal retrenchment in some countries and persisting difficulties in access to finance are adversely affecting the dynamics of the recovery. Overall output in the construction sector has stabilised at a relatively low level, however headline figure conceals continued weakness in house building offset by a limited recovery in civil engineering works (roads, bridges etc.).
In the last three months to August 2011, manufacturing production was 4.7% higher than a year ago and slightly above the level registered in the preceding three months. The supply disruptions stemming from the Japanese tsunami now seem to have been largely overcome. Manufacturing output is now 16% higher than its trough in early 2009, but still some 7% below its peak in early 2008. Output is now higher than its previous peak in pharmaceuticals, food and in computer and electronics, whilst the biggest contractions have been registered in non-metallic mineral products, furniture, tobacco, and textiles. Labour markets have remained broadly stable over recent months. Recent data and forecasts for services, including tourism, remain positive, but their outlook depends on the general economic situation.
Extra-EU exports have already recovered their former peak, but they have stabilised in recent months. Growth in intra-EU trade, internal demand and private consumption continue to be subdued and lag behind, reflecting slower overall output growth in Europe as compared to the rest of the world, particularly emerging Asia.
Data on the second quarter of 2011 show some signs of improvement in manufacturing employment, driven mainly by temporary and part-time jobs. Nonetheless, compared to the cyclical peak in 2008, manufacturing jobs have shrunk by some 11%. The unemployment rate remains at a high level, with some improvement in some countries.
Substantial differences in the pace of economic recovery continue to prevail among the Member States. The recovery is visible in all countries, excepting Cyprus and Greece, but only in a few the manufacturing output has exceeded its pre-crisis levels. The highest increases have been registered in Poland, Estonia, Ireland and Belgium.