April report from Eurostat: EU industry indicators have fallen to a critical level
15 June 2020
According to Eurostat, the indicators of industrial production in the Euro zone fell to a critical level. The pandemic has affected all construction and manufacturing industries in European countries.In April, industrial production in the Euro zone fell by 17.1%. This sharp decline was caused by the effects of the coronavirus pandemic, which led to disruptions and shutdowns in almost all manufacturing and construction sectors. Many analysts noted that even with this fall, the indicators were better than predicted, given how many factories and construction sites suspended their work during the lockdown and quarantine.
According to Eurostat data, the April drop in indicators was the highest since 1991. The March figures were lower and were estimated at 11.3%. At the same time, economists polled by the Reuters news Agency on average expected a 20% decline in April.
The European Central Bank also published a new forecast for the current month. According to it, the Euro zone economy will shrink by 8.7% this year. However, recent policy decisions taken by States in late may and early June indicate that businesses are on the road to recovery.
However, the major European economies were hit hard by the financial crisis. In Spain, industrial production decreased by 21.8%, in France-by 20.1%, in Italy-by 19.1%, in Germany-by 18%.
Hungary, Romania, Slovakia and the Czech Republic were among the countries with the sharpest declines; industrial production fell 23-30% in all four countries in April as their main buyer, Germany, sharply lowered its market purchasing power.
The countries with the smallest drop in industrial production are Finland, Denmark, Croatia, the Netherlands, Latvia and Ireland, where the figure fell by only 8%.
According to the Office for national statistics of the UK, government industrial production figures fell by 20.3% between March and April.
In April, car production in Europe almost completely stopped. In the period from March to April, car production in Germany fell by 75%, and in France-by 88%. This prompted France and Germany to introduce additional measures to support this sector. In addition, Airbus, the leader of the European aerospace industry, cut production by a third in April due to a sharp drop in demand for aircraft from the affected airlines. In order to help restore production, Paris has announced a 15 billion Euro support package for aerospace companies.
According to data published by Italian statistical agencies, state production of textiles, clothing, leather goods and accessories fell by more than 80% year-on-year in April. Between March and April, car production in Spain fell by 86.3%, while clothing production fell by 2/3, and leather and footwear production fell by 60%.
Many countries reported that the sectors least affected by the crisis were pharmaceuticals, agriculture, food production and energy.
Despite the fact that each country is currently focusing its efforts on restoring pre-crisis production levels and launching the economy, it is expected that they will be able to fully recover only by next year.