Economic Overview October 2015. Production Productivity Employment, working hours Inflation, output...

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Economic Overview

October 2015

•Production•Productivity•Employment,

working hours•Inflation, output

prices•Wages, unit

labour cost•Trade balance

Outline (1) Total Economy

(2) Industry

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Total Economy

Slight improvement in economic growth in the EU in the last two years after a “double-dip” recession.

According to (optimistic) EU forecasts this trend will continue in 2015 and 2016.

Source: AMECO

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Increased GDP volume is expected in almost all European countries in 2015.

However, less than 1% growth in five countries.

Only 0.5% in Greece which has lost 25.6% since the crisis.

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The economic growth is forecast to further pick up in 2016.

At least 1% GDP increase in every country if the predictions materialise.

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The annual production value was just above the pre-crisis level in the EU in 2014.

Spain had lost 5.0%, Italy 8.9% and Greece 25.8%.

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Big differences with respect to GDP per capita in Europe.

Four countries below 8 000 euros per year.

The EU average was 27 400 euros in 2014.

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A bit more equality when differences in purchasing power are eliminated.

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Industry (NACE B-E) accounted for 18.9% of total value added in 2014.

B= Mining, oil and gasC= ManufacturingD= Energy supplyE = Water supply

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The total employment in EU-28 was reduced by 7 million from 2008 to 2013.

It will take another 2-3 years before we again see the level of 2008.

Source: AMECO

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Employment still below pre-crisis levels in the EU-28 and EA-19.

Turkey most positive with 25.1% increase since 2007.

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Industry (NACE B-E) accounted for 15.6% of employment in the EU-28 last year.

B= Mining, oil and gasC= ManufacturingD= Energy supplyE = Water supply

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Big differences between the countries.

The working hours are longest in Poland.

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The average number of yearly working hours lower than in 2007 in most countries.

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More than 10% unemployment in EU-28 last year.

Big differences between the countries.

Spain and Greece both over 24%.

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Unprecedentedly high levels of unemployed people under 25 years.

Spain and Greece over 50%. Only two countries below 10%.

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A 4.5% growth in productivity in the EU since 2007.

Nine countries above 10%.

Highest increases in new EU member states, Ireland and Spain.

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Nominal wage increases have exceeded real labour productivity growth in all countries except Greece, Ireland and Cyprus since 2007.

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Real unit labour cost has fallen in twelve countries since 2007, meaning that the wage share of GDP has gone down and the capital share has grown.

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Germany had a surplus in its foreign trade of 215 billion euros last year.

France and UK had deficits of 162 million between them.

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The Netherlands exported goods and services worth 180 billion euros more than it imported from other EU member states last year.

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Germany has the highest trade surplus with countries outside the EU.

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Industry

Manufacturing sector has greatest relative significance in the Czech Republic, Hungary, Slovenia and Germany.

EU average is 15.3%.

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EU average 18.9% when mining, petroleum production and energy supply are included.

Norway on top because of big oil and gas sector.

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Industrial production in the EU-28 seems to be levelling out.

Source: Eurostat, Short-term business statistics.

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Most positive developments in new EU member states

Stagnation in Germany.

Down in EU-28 and EA-19: 8-9%.

Four countries have lost more than 20%.

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Biggest reduction in the mining sector and clothes’ production sector since 2007.

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Industrial employment in the EU was 3.9 million lower in 2014 than in 2008.

The level is almost as high as in 2010.

Slight increase in 2014.

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Germany has 8 million jobs in industry.

8 countries above one million, also Romania and the Czech Republic.

Poland is now number 3 (no data for Turkey).

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Almost all countries are in the red. Industrial employment heavily under pressure.

Germany is the only positive exception.

Reduction in Spain close to 30%.

Average drop in EU and EA higher than 10%.

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All sectors are in the red but MET industries, energy supply and pharmaceuticals have done better than the rest.

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Increase in seven countries, but not very dramatic.

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In EU-28 the real labour productivity per hour in the industry has gone slightly up since the onset of the crisis.

Increase in Romania: 67.3%.

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Big variations with respect to wages per employed person (total gross wages divided by number of employees).

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The lowest average gross wages in industry are just over 3 euros per hour.

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Wage increases highest in the East and South East since the crisis.

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Low inflation rates in most countries since the onset of the crisis.

Highest growth in Turkey and Iceland.

EU average only 15.4% in eight years. Even lower in the euro zone.

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Exceptionally low inflation in 2014.

Only 0.4% in EA-19.

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Growth in most countries, but in Cyprus, the UK and Luxembourg real wages per hour in industry have actually fallen since the crisis began.

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Gross wages and salaries have increased faster than production in almost all European countries since 2007.

The average increase in EU-28 was 18.9%.

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The picture is diverse.

Germany, Italy, France and Spain are among the countries with increased RULC in the industry since 2007.

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Industrial companies have increased their producer prices in most countries since 2007 (by more than 20% in nine countries).

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