Economic Overview October 2015

Production Productivity Employment, working hours Inflation, output prices Wages, unit labour cost Trade balance Outline (1) Total Economy (2) Industry 2

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  Source: AMECO 4

 Increased GDP volume is expected in almost all European countries in  However, less than 1% growth in five countries.  Only 0.5% in Greece which has lost 25.6% since the crisis. 5

 The economic growth is forecast to further pick up in  At least 1% GDP increase in every country if the predictions materialise. 6

 The annual production value was just above the pre-crisis level in the EU in  Spain had lost 5.0%, Italy 8.9% and Greece 25.8%. 7

 Big differences with respect to GDP per capita in Europe.  Four countries below euros per year.  The EU average was euros in

 A bit more equality when differences in purchasing power are eliminated. 9

 Industry (NACE B- E) accounted for 18.9% of total value added in B= Mining, oil and gas C= Manufacturing D= Energy supply E = Water supply 10

 The total employment in EU-28 was reduced by 7 million from 2008 to  It will take another 2-3 years before we again see the level of Source: AMECO 11

 Employment still below pre-crisis levels in the EU-28 and EA-19.  Turkey most positive with 25.1% increase since

 Industry (NACE B- E) accounted for 15.6% of employment in the EU-28 last year. B= Mining, oil and gas C= Manufacturing D= Energy supply E = Water supply 13

 Big differences between the countries.  The working hours are longest in Poland. 14

 The average number of yearly working hours lower than in 2007 in most countries. 15

 More than 10% unemployment in EU-28 last year.  Big differences between the countries.  Spain and Greece both over 24%. 16

 Unprecedentedly high levels of unemployed people under 25 years.  Spain and Greece over 50%. Only two countries below 10%. 17

 A 4.5% growth in productivity in the EU since  Nine countries above 10%.  Highest increases in new EU member states, Ireland and Spain. 18

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

 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. 20

 Germany had a surplus in its foreign trade of 215 billion euros last year.  France and UK had deficits of 162 million between them. 21

 The Netherlands exported goods and services worth 180 billion euros more than it imported from other EU member states last year. 22

 Germany has the highest trade surplus with countries outside the EU. 23

Industry

 Manufacturing sector has greatest relative significance in the Czech Republic, Hungary, Slovenia and Germany.  EU average is 15.3%. 25

 EU average 18.9% when mining, petroleum production and energy supply are included.  Norway on top because of big oil and gas sector. 26

 Industrial production in the EU-28 seems to be levelling out.  Source: Eurostat, Short-term business statistics. 27

 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%. 28

 Biggest reduction in the mining sector and clothes’ production sector since

 Industrial employment in the EU was 3.9 million lower in 2014 than in  The level is almost as high as in  Slight increase in

 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). 31

 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%. 32

 All sectors are in the red but MET industries, energy supply and pharmaceuticals have done better than the rest. 33

 Increase in seven countries, but not very dramatic. 34

 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%. 35

 Big variations with respect to wages per employed person (total gross wages divided by number of employees). 36

 The lowest average gross wages in industry are just over 3 euros per hour. 37

 Wage increases highest in the East and South East since the crisis. 38

 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. 39

 Exceptionally low inflation in  Only 0.4% in EA

 Growth in most countries, but in Cyprus, the UK and Luxembourg real wages per hour in industry have actually fallen since the crisis began. 41

 Gross wages and salaries have increased faster than production in almost all European countries since  The average increase in EU-28 was 18.9%. 42

 The picture is diverse.  Germany, Italy, France and Spain are among the countries with increased RULC in the industry since

 Industrial companies have increased their producer prices in most countries since 2007 (by more than 20% in nine countries). 44