European GDP, 4th Quarter 2020: Eurostat has published a preliminary estimate of GDP for the final period of last year (the UK data will be out next Friday). This shows that GDP in the Euro-zone fell by -0.7% compared to the previous quarter giving an estimate for 2020 of a decline of -6.8%. For the EU as a whole, the quarter-on-quarter trend was -0.5% with a fall of -6.4% for the year.
This opens the possibility of a double-dip recession with GDP having already had two consecutive quarters of non-positive growth (Q1 and Q2 of 2020) before the bounce back to positive territory in the 3rd quarter. However, we don’t see the same pattern for the individual countries that have released Q4 data; only Austria (-4.3%), Italy (-2.0%) and France (-1.3%) saw a quarter-on-quarter fall in GDP while 8 other Member States (including Germany, although only +0.1% and so open to reversal in future revisions) saw a small increase in Q4.
If you would like more details, the Eurostat News Release can be downloaded from their web-site at https://ec.europa.eu/eurostat/news/news-releases (02 February) or requested from MTA.
BEAMA Contract Price Adjustment Service: Do you have long-term contracts, either with customers or suppliers? Have you thought about incorporating something in the contract that allows you to adjust the price according to changes in input costs?
On behalf of members, MTA subscribe to a service provided by our colleagues at BEAMA which gives a monthly track of key indices on labour and materials costs. Of course, you need to get the principle and the relevant formulas included in the contract, but this gives you a way of updating the relevant prices independently.
If you would like more details on this, please contact Geoff Noon (firstname.lastname@example.org) at MTA; we can send you a copy of the latest report and some typical formulae and can have a discussion about whether or not this would be useful for you.