Despite managing to avoid another recession in 2014, Europe is forecasted to have a slow manufacturing growth in 2015.
Due to decelerated export growth and a lack of government funding, experts expect European manufacturing to grow only 2% throughout 2015. In this blog post we’ll be looking at why this growth will be so slow and what this will mean for manufacturers in Europe.
Compared to some of the previous recession-hit years, 2014 was an okay year to be in manufacturing. A wage rise in the middle of the year kept consumer expenditures good and firms generally had a positive outlook on the growth that they would experience.
However, the growth that European manufacturing is facing is still not expected to reach the levels that everybody will have been hoping for. A lack of monetary input from European governments lead to a decelerated export growth as demand from Russia, the Middle East and Asia fell. Another cause of slow growth in European manufacturing in 2014 is the lack of jobs created. Although some were created, job creation was not at a level that anybody had hoped for.
With all this being said, the future of manufacturing in Europe is not set in stone. Elections that are being help in countries such as Denmark, Finland, Poland and Spain in 2015 will almost certainly impact the manufacturing growth. The results of these elections could possibly have an effect on the Trans-Atlantic Trade Investment Partnership that would help to increase exports from Europe. The Russia-Ukraine conflict will also pose a risk and the sanctions placed on Russia may be altered.
So what impact will this slow growth have on manufacturers? Well, the effects won’t be catastrophic. Although the growth is slow, there still is somewhat of a growth and this means that things are still heading in the right direction. Manufacturers may still have to work hard to sell products, and may not be hiring as many people as they would like to, but they’ll certainly have a better time than during the recession. With the ability to increase the growth mainly in the hands of politicians, manufacturers will simply have to grit and bare this slow growth until it speeds up.
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