European Industrial Production, August 2022: According to Eurostat, total industrial production in the EU was +1.1% higher than in July, with an increase of +1.5% for the Euro-zone. This was not enough to reverse the falls that were recorded in July and industrial production has been varied since the post-pandemic bounce at the end of 2020. However, the increase this month does mean that industrial production is higher than a year ago – by +3.5% for the EU and +2.5% for the Euro-zone.
In the major sub-sets, the capital goods industries are leading the way with output rising month-on-month by +2.0% in the EU and +2.8% for the Euro-zone. Compared to August 2021, the improvements are +8.9% and +8.2% respectively. Although this is encouraging news, it is also a reflection of the fact that the capital goods industry was hardest hit during the pandemic and also had the largest falls in output in July.
Looking back over 12 months, of the 26 Member States for whom the August data is available (Cyprus is missing), 21 recorded an increase in total industrial production and only 5 had a decline. The fastest growth was in Bulgaria (+16.5%), Lithuania (+14.4%) and Denmark (+14.1%) while the largest falls were in Belgium (-10.3%), Luxembourg (-2.5%) and Slovakia (-2.0%).
Finally in this item, it is worth noting that industrial production is dominated by manufacturing but it also includes output of the extraction industries (mining & quarrying) and utilities (supply of electricity, gas & water).
You can download the euro-indicators bulletin from the Eurostat website at https://ec.europa.eu/eurostat/news/euro-indicators (12 October) or request it from MTA.
Euro-zone Investment & Profitability, 2nd Quarter 2022: According to the latest Eurostat data, the business investment rate in the Euro-zone was stable at a revised figure of 23.9%. This has, for now at least, plateaued at the same rate as we saw in the 1st period of 2021 although this is generally higher than we saw before the pandemic.
The gross investment rate of non-financial companies is defined as gross fixed capital formation (investment) divided by gross value added; the stable position came because the two elements moved at a similar rate compared to the previous quarter.
The profitability rate of non-financial companies in the Euro-zone fell to 39.8%; this is its lowest level since the pandemic period in the middle of 2020. This is calculated as gross operating surplus (calculated based on compensation of employees and other taxes less subsidies on production) divided by gross value added and the lowering of the ratio was because gross value added increased by less than the operating surplus.
You can get more information on this by downloading the euro-indicators release from the Eurostat website at https://ec.europa.eu/eurostat/news/euro-indicators (05 October – note that this is headlined “household saving rate …”) or we can send you a copy if you prefer.
CECIMO Annual Economic & Statistical Report 2021: The CECIMO annual report provides a round-up of data for the European machine tool industry collectively along similar lines (but in a different style) to our own Basic Facts booklet. It has sections on production, orders and trade and as well as tracking the data for Europe, it places these in the context of global data for the industry.
It reflects the recovery from the pandemic affected year of 2020, although most indicators have not yet fully recovered thanks to supply constraints which are affecting machine tool companies just as much as the more widely recognised problems in the automotive industry. European machine tool production grew by +11% in 2021 and although this is slower than the +20% recorded for the global total, Europe (the 15 members of CECIMO) still has the largest share of world machine tool production at 31%, just ahead of China which has 30%; Japan accounts for 12% of the global total and the USA a further 9%.
You can download the report at https://www.cecimo.eu/economic-and-statistical-annual-report/ or request a copy from MTA.